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Activision Blizzard Stock Falls 6 Percent on Disappointing Outlook

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ATVI stock fell 5.8 percent in after-hours trading on Oct. 29 after Activision Blizzard posted its third-quarter earnings results. The company's earnings and revenue beat analysts’ consensus expectations. However, the company’s fourth-quarter outlook fell well short of analysts’ consensus expectations.  

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What is Activision Blizzard’s stock news?

In the third quarter, Activision Blizzard reported an adjusted EPS of $0.88 compared to $0.38 in the third quarter of 2019. The adjusted EPS beat analysts’ average estimate of $0.65. Activision Blizzard generated sales of $1.95 billion in the third quarter, which was 54.4 percent more than it did in the third quarter of 2019. The company beat analysts’ average sales estimate of $1.69 billion.

ATVI Stock Reacts To Activision Blizzard Earnings
Source: Activision Blizzard
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In the fourth quarter, Activision Blizzard expects revenue of $2.0 billion and an adjusted EPS of $0.63. In comparison, Wall Street analysts expect Activision Blizzard to post revenue of $2.62 billion and an adjusted EPS of $1.11 in the fourth quarter. The company announced that it would release World of Warcraft: Shadowlands on Nov. 23. The company postponed its planned release in late October.

ATVI stock fell after Q3 earnings

ATVI stock was down about 1.2 percent at $76.84 in pre-market trading as of 8:32 a.m. ET on Friday, Oct. 30. The stock fell 1.6 percent on Oct. 29 and closed at $77.77 with a market capitalization of $60 billion. ATVI stock has fallen by 4 percent in the last five days, while it has risen by 39.3 percent in the last year.

ATVI stock is trading 11.4 percent below its 52-week high of $87.73 and 54 percent above its 52-week low of $50.51. Year-to-date, the stock had risen by 30.9 percent as of Oct. 29.

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ATVI stock on Stocktwits

ATVI stock has become a major talking point on Stocktwits and other social platforms. While some investors on Stocktwits see the strong third-quarter earnings results as a good reason to buy ATVI stock, others were bearish and expect the stock to fall.

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What is ATVI’s stock forecast?

Currently, analysts' average stock price forecast for ATVI is $95.45, which suggests a 22.7 percent upside. The highest target price of $106 implies a 36.3 percent upside, while the lowest target price of $72 suggests a 7.4 percent downside. Among the 27 Wall Street analysts tracking ATVI, 20 recommend a buy and seven recommend a hold. None of the analysts recommend a sell. 

Long-term investors should consider buying ATVI stock based on the strong growth outlook. The company will likely benefit from people staying home and playing video games more amid the COVID-19 pandemic. Also, Activision Blizzard’s guidance for the fourth quarter is very conservative since there isn't a reason for the momentum to slow down.

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