|By Nathan Young|
Activision Blizzard, Inc. produces video games as well as other items that compliment the video game sector. With Esports gaining serious traction, the video game world has been put on notice to get on board, or they will feel the negative consequences of not participating in competitive gaming. With game companies such as Riot, who produce League of Legends, there are people going to school solely to compete in the Esports arena. Activision Blizzard has been around for some time now, so let us dive into their latest numbers to see if they are primed to excel in the near future.
Taking a look at the company’s third quarter numbers in an 8-K filing, we can see that they set a record for net revenues at $1.57 billion, compared with $990 million for the third quarter of 2015. Net revenues from digital channels were an all-time quarterly record of $1.34 billion, growing 18% quarter over quarter and 114% year over year. Also, the company generated a record third quarter $456 million in operating cash flow for the quarter ended September 30, 2016. These numbers are a positive sign as the company it posting record numbers. Let us switch over to the chart and see if price is agreeing with these record numbers.
Activision Blizzard has been on a healthy uptrend for quite some time, looking at the monthly chart. We can see healthy pullbacks over the long term, but the support trend line has not been broken yet. From a charting perspective, nothing appears to be wrong and it seems to be bouncing for another run to the upside. This is a stock to certainly keep an eye on.
Taking a look at their latest 10-K filing, we can begin to focus in on the risks that investors should be aware of. The company stated they have taken on significant debt, which could adversely affect the business. They cite entering into a $2.5 billion credit agreement, which is a secured loan and a $250 million secured revolving credit. This is something to watch incase debt levels begin to rise and cash flow begins to slow. Also, the company agrees that they have to maintain delivery of high quality content; otherwise they risk losing customers, which then adversely affects the company.
Overall, this company seems to be on the right track. The debt does raise some flags as that has the potential to get out of hand, but I wouldn’t look deeply into that, rather just be aware of it. The numbers and the chart support that this company appears healthy and a solid investment, but with any investment, be sure to consult a professional to ensure your financial goals are being met.
|This media report from Macroaxis distributed on December 12, 2016 was a factor to the next trading day price appreciation.The overall trading delta against the next closing price was 0.4% . The overall trading delta when the story was published against the current closing price is 88.24% .|