by SignalFactory · September 13, 2021 | 09:48:55 UTC
Activision Blizzard is also affected by the latest gaming regulations by the Chinese government – for example, due to its mobile hit “Call of Duty: Mobile”. It is difficult for minors to circumvent the game time restriction, as the Tencent subsidiary TiMi, which developed the smartphone game uses the smartphone’s facial recognition to match the active user with a state database in addition to the ID card for registration.
According to analysts, the new restrictions are unlikely to affect US gaming companies such as Activision Blizzard. Because, according to Jefferies, a maximum of five percent of revenues come from China, and even at Tencent minors only makeup around three percent of revenues. In addition, the shooter series “Call of Duty”, for example, is clearly aimed at an older target group.
Favorable growth: For the stock of Activision Blizzard, the gaming regulation after the sexism allegations is the next price shock that is unlikely to have long-term effects on the business. Accordingly, the analysts continue to expect strong growth from the US group.
Driven by the strong performance of the core franchises – above all “Call of Duty” – an increase in sales of 8.6 percent to 8.78 billion dollars is to be achieved in the current financial year. Earnings per share are likely to rise by a third to $ 3.81.
These are strong forecasts gave the recent price losses around the negative news. The result: The stock of Activision Blizzard is currently a real bargain. While the US paper has been valued at a P /E ratio of around 29 at the historical average over the past few years, the current P/E ratio for 2022 is 18.
The political environment in China is undoubtedly slowing the currently accelerated mobile push, which is specially tailored to the Asian markets. But investors who value quality brands, long-term growth, attractive cash flows, and a fundamentally favorable valuation are spot on with Activision Blizzard shares.
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