Activision (NASDAQ:ATVI) reported first-quarter results that met expectations but the company offered a light outlook. Is the strong run-up in the stock that lasted for around four years now over? With downside guidance, Activision will not attract growth investors.
Q1 2019 Results
Activision reported 345 million monthly active users, with King Digital’s 272 million MAUs making up most of that number. Blizzard had 32 million MAU and Activision had 41 million. Candy Crush Friends Saga gives the company the exposure to growth in the mobile space. But the Q2 bookings guidance of $1.15 billion falls short of the $1.28 billion expected. EPS of $0.23 is well-below the $0.37 EPS consensus. And for calendar 2019, bookings and EPS are both below consensus.
Areas of Strength
The e-Sports unit is strong. The company as a whole continues to focus on the delivery of major content releases. Helped by the strong PC franchise and console market, Activision believes it will continue to grow alongside this channel. Yet the company will reach for more growth through expanding reach, engagement, and the monetization of its franchises.
Activision had cut staff to lower costs but said in its Q1 update that it would increase developer headcount in its biggest franchises.
Your Takeaway
Activision stock is holding its uptrend but could stay flat until the big game titles show better sales beyond the 2019 year.
