I really think that the ATVI stock target price is far above the current price. The price dropped significantly at the beginning of May. The fair price was $103,43 based on the discounted cash flow calculation. The margin of safety was at 13%, so I thought it was a good opportunity to check the fundamentals and consider the ATVI stock as my next buy. Another reason is that ATVI stock dividend history shows the increasing dividend payments for the past 10+ years, which is usually a positive indicator of company performance and stability.
Short History Of ATVI
I’ve been playing video games for more than 25 years, and one of the first games I really loved was Diablo. The game was published back in 1997 by Blizzard Entertainment. Together with Starcraft (released in 1998, also by Blizzard), it really changed the world of PC gaming. Few years after that, Blizzard Entertainment published World of Warcraft, a massive multiplayer online role-playing game, which still has millions of active players all over the world.
Activision was founded back in 1997 in California, and it has always been one of the most important (and biggest) players in the gaming industry. The company published some of the biggest titles in the history of gaming:
- MechWarrior series
- Quake series
- Heretic 2
- Tony Hawk’s series
- Soldier of Fortune series
- Call of Duty series…
In 2008, Activision merged with Vivendi Games (Blizzard’s parent company). Five years after that, Activision Blizzard decided to buy over 400 million shares from Vivendi, and the result was a completely independent company.
Is ATVI Stock A Good Buy?
ATVI’s sales increased by almost 25% in 2020. The growth continued in Q1 2021. The number of monthly active users increased to 435 million during the same quarter. The stock price rose by 56% last year, which is much more than the S&P 500 (16%). The company is constantly profitable and the analysts expect the earnings to grow during the current year by almost 9%. I definitely think that the company will continue its growth in the following years. Call Of Duty is one of the most popular franchises in the gaming industry, and the popularity of other games like Diablo Immortal, Candy Crush, and Overwatch can help the company to grow post-pandemic years.
Is ATVI A Buy Now?
The stock is currently trading at 6% below its intrinsic value. A lot of analysts think it is overvalued considering the P/E ratio of 32.9. But I think that the company’s business is well diversified and its portfolio of games can help the company grow over the next 3-5 years. I think that the Activision Blizzard stock target price is much higher than the current price of $97,25 and you should really consider adding it to your portfolio. I think that the ATVI stock target price will increase by at least 50% in the next few years.
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