Is Activision Likely to Outperform?

With shares of Activision Blizzard (NASDAQ:ATVI) trading at around $13.54, is ATVI an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

The largest video game maker in the United States recently reported Q4 EPS of $0.31, and Q4 revenue of $1.77 billion. Both were significant improvements over last year. These impressive results were attributed to “Skylanders,” “Call of Duty,” and overall strong holiday sales. “Call of Duty: Black Ops 2” was the first game ever to generate $1 billion in sales in 15 days. “Skylanders Giants” was the number one children’s title in Q4 in North America and Europe.

It’s still possible that Activision will seek a buyer. It’s also possible that Activision will put some of its cash to use in the way of dividends, stock repurchases, and/or acquisitions. The only roadblock here is if Activision wants to hold on to that cash due to volatile market conditions.   

Let’s take a look at some important numbers prior to forming an opinion on this stock…