Activision Blizzard Q2 Earnings Top Estimates, Raises Outlook

Activision Blizzard (ATVI) delivered strong second-quarter results and raised its outlook for the year after benefiting from strong execution by creative and commercial teams.

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The video game company generated $1.92 billion in net bookings in the quarter, beating the consensus estimate of $1.89 billion. However, the result came in below the $2.08 billion generated in the same quarter last year. In-game net bookings also declined to $1.32 billion, compared to $1.37 billion reported in the second quarter of 2020.

Earnings per share landed at $1.20, compared to $0.81 for the second quarter of 2020, and was above consensus estimates of $0.74. Activision Blizzard ended the quarter with 408 million monthly active users.

Over the last two years, investments in large franchises have allowed Activision Blizzard to scale and enhance the financial trajectory of its key gaming titles, including Call of Duty, World of Warcraft, and Candy Crush. (See Activision Blizzard stock charts on TipRanks)

“This work continued to deliver strong results in the second quarter, even as countries continued to reopen from lockdowns related to the pandemic,” Activision stated in a press release.

For the third quarter, Activision Blizzard projects earnings of $0.75 a share, with earnings of $3.54 a share for 2021. Net bookings for Q3 and 2021 are expected to be $1.85 billion and $8.65 billion, respectively.

Following the impressive second-quarter results, Barclays analyst Mario Lu reiterated a Buy rating on the stock and raised his price target to $116 from $107, implying 31.26% upside potential to current levels.

According to the analyst, the current valuation presents an attractive entry point given the clear path for long-term growth.

Consensus among analysts is that ATVI is a Strong Buy based on 14 unanimous Buys. The average Activision Blizzard price target of $116.43 implies 42.82% upside potential to current levels.