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Why Did Activision Perform Poorly in Q1?

Activision Blizzard (ATVI) has delivered disappointing first-quarter results as both earnings and revenue missed estimates due to the poor performance of its latest title Call of Duty: Vanguard. The interactive entertainment company develops and publishes console, online, and mobile games.

Revenue in the first quarter fell to $1.77 billion from $2.28 billion in the same quarter last year and failed to surpass analysts’ expectations of $1.8 billion. The fall can be attributed to lower income from Product Sales and In-game, Subscriptions, and Other revenues.

Adjusted earnings per share declined 34.7% year-over-year to $0.64. Also, earnings fell short of consensus estimates of $0.70 a share. Activision Blizzard’s net bookings were $1.48 billion, down from $2.07 billion in the first quarter of 2021.

As of March 31, 2022, ATVI’s monthly active users stood at 372 million, down 63 million from the last year’s quarter. Perhaps, the removal of lockdown measures and resumption of normal activities resulted in this fall.

Stock Rating

Following the release, Benchmark Co. analyst Mike Hickey reiterated a Buy rating on Activision Blizzard stock with a $100 price target, implying 28.1% upside potential to current levels.

Consensus among analysts is a Strong Buy based on seven Buys and one Hold. Activision Blizzard’s average price target of $95.63 implies 22.5% upside potential to current levels.

Website Traffic

One can predict a company’s performance well ahead of the earnings release with the help of our Website Traffic Tool.

The tool reveals data on the number of unique visits plus total visits to a company’s website over a period of time. One can also use this data to analyze what the visitor footfall on a publicly-traded company’s website indicates about the “stickiness” of the company’s products and services.

According to the tool, in the first quarter, the ATVI website’s total projected worldwide visits fell 14.4% sequentially.

Takeaway

Poor quarterly performance due to falling demand for its products is a key concern for Activision Blizzard. Investors are likely to closely watch the key metrics in the coming months to gain confidence in the stock.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash. 

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