Why You Should Buy Activision Stock Now
Activision Blizzard (NASDAQ: ATVI) is one of the leading video game publishers in the world, with popular franchises such as Call of Duty, World of Warcraft, Overwatch, and Candy Crush. The company has been delivering strong financial results and growing its user base amid the pandemic, as more people turn to gaming for entertainment and social connection. In this article, we will explore some of the reasons why you should buy Activision stock now and benefit from its long-term growth potential.
Activision Has a Diversified and Loyal Audience
One of the key strengths of Activision is its diversified and loyal audience across different genres, platforms, and regions. The company has over 400 million monthly active users (MAUs) as of Q1 2021, with 150 million MAUs in the Activision segment, 27 million MAUs in the Blizzard segment, and 258 million MAUs in the King segment. These segments cater to different types of gamers, from hardcore shooters to casual puzzlers, and offer a variety of monetization opportunities, such as in-game purchases, subscriptions, advertising, and esports.
Moreover, Activision has a loyal fan base that keeps coming back to its games year after year. For instance, Call of Duty is one of the most successful franchises in gaming history, with over 400 million copies sold since its launch in 2003. The latest installment, Call of Duty: Black Ops Cold War, was the best-selling game of 2020 in the U.S., according to NPD Group. The franchise also has a thriving online community, with over 100 million MAUs across its free-to-play titles, Call of Duty: Warzone and Call of Duty: Mobile.
Activision Is Investing in Growth Opportunities
Another reason to buy Activision stock now is that the company is investing in growth opportunities that will expand its reach and revenue streams. For example, Activision is developing new games and content for its existing franchises, such as Diablo IV, Overwatch 2, and Call of Duty: Vanguard. The company is also exploring new genres and platforms, such as mobile gaming, which is the largest and fastest-growing segment in the global gaming market. Activision has several mobile games in the pipeline, including Diablo Immortal, Crash Bandicoot: On the Run!, and Call of Duty Mobile China.
In addition, Activision is tapping into the lucrative esports market, which is expected to reach $1.6 billion by 2024, according to Newzoo. The company owns two of the most popular esports leagues in the world: the Call of Duty League and the Overwatch League. These leagues attract millions of viewers and sponsors, generating revenue from media rights, advertising, merchandise, and live events. Activision is also expanding its esports presence in China, which is the largest esports market in the world.
Activision Has a Strong Financial Performance
The final reason to buy Activision stock now is that the company has a strong financial performance that reflects its competitive advantage and growth potential. In Q1 2021, Activision reported revenue of $2.28 billion, up 27% year-over-year (YOY), and earnings per share (EPS) of $0.98, up 64% YOY. The company also generated $844 million in operating cash flow, up 23% YOY.
Furthermore, Activision raised its full-year guidance for 2021, expecting revenue of $8.37 billion and EPS of $3.42. This implies a revenue growth of 10% YOY and an EPS growth of 15% YOY. The company also expects to increase its dividend by 15% to $0.47 per share annually.
The Bottom Line
Activision Blizzard is a leading video game publisher that has a diversified and loyal audience, a robust pipeline of new games and content, and a solid financial performance. The company is well-positioned to capitalize on the growing demand for gaming and esports in the post-pandemic world. Therefore, we believe that buying Activision stock now is a smart move for long-term investors who want to benefit from the booming gaming industry.