What: Shares of Activision Blizzard, Inc. jumped an impressive 13.9% in May, according to data provided by S&P Global Market Intelligence
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So what: First quarter non-GAAP revenue, which adjusts for accounting variability in revenue recognition, jumped 29.2% to $908 million
Management also raised non-GAAP revenue guidance to $6.275 billion for the full year and sees earnings of $1.78 per share.
Now what: Shares of Activision Blizzard are no longer cheap at 22 times earnings estimates, but the company has done a great job transitioning its business to a more stable revenue model. Subscriptions, mobile games, and the continuous release of expansion packs keep revenue flowing in all year and make the company less reliant on big game releases every year. And thanks to e-sports, the company has great engagement and an improving model for turning that engagement into revenue. In the long term, the company is well positioned in the game market.
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