Activision Blizzard (ATVI) delivered disappointing fourth-quarter results characterized by earnings and revenue misses. The results come after the company reached an agreement to be acquired by Microsoft for $95 a share. ATVI shares fell 0.38% to close at $78.95 on February 3.
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Activision Blizzard is an interactive entertainment company that develops and publishes console, online, and mobile games.
Earnings Review
Revenue in the fourth quarter fell to $2.16 billion from $2.41 billion in the same quarter the previous year and worse than the $2.85 billion that analysts were expecting. Full-year net revenues improved to $8.80 billion from $8.09 billion generated in 2020.
Diluted earnings per share in Q4 improved to $1.01 from $0.76 in the same quarter last year. However, earnings fell short of consensus estimates of $1.33 a share. Activision Blizzard’s net bookings in Q4 were $2.49 billion, a decline from $3.05 billion for the fourth quarter of 2020. Full-year net bookings also fell to $8.35 billion compared to $8.42 billion in 2020.
In addition, Activision Blizzard has confirmed that it will be acquired by Microsoft in a deal that values the company at $68.7 billion. While the transaction is still subject to regulatory review and shareholder approval, it is expected to close before June 30, 2023.
Stock Rating
BMO Capital analyst Gerrick Johnson has reiterated a Buy rating on Activision Blizzard stock with a $95 price target, implying 20.33% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 7 Buys and 13 Holds. The average Activision Blizzard price target of $94.33 implies 19.48% upside potential to current levels.
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