Activision Blizzard (ATVI) released its first-quarter earnings results after the markets closed on May 2. Its stock fell 4.8% on May 3 as investors gave the thumbs down to its earnings and guidance. It posted revenue of $1.82 billion in the first quarter compared to $1.96 billion in the first quarter of 2018. However, the company’s first-quarter revenue was better than the guidance of $1.72 billion it provided in February during its fourth-quarter earnings release.
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Activision Blizzard reported GAAP (generally accepted accounting principles) EPS of $0.58 in the first quarter compared to $0.65 in the first quarter of 2018. Like its revenue, the company’s EPS were better than its guidance. During their fourth-quarter earnings call, Activision Blizzard provided first-quarter EPS guidance of $0.39. In 2019, Activision Blizzard expects to post revenue of $6.0 billion and GAAP EPS of $1.18.
After Activision Blizzard’s earnings release, Morgan Stanley lowered its target price from $55 to $53, while Bernstein lowered its target price by $1 to $40. Stifel also lowered its target price from $53 to $52. Overall, Activision Blizzard has received “strong buy” ratings from eight analysts, while 14 analysts have rated it as a “buy” or some equivalent. The remaining 12 analysts polled by Thomson Reuters have rated Activision Blizzard as a “hold.”
The stock’s mean consensus target price of $52.93 represents a potential upside of 15.0% over its May 10 closing price. Electronic Arts (EA) and Take-Two Interactive Software (TTWO) are trading 17.8% and 18.4% below their mean consensus target prices, respectively. Take-Two Interactive Software is expected to release its earnings today. Electronic Arts released its earnings results last week.