Intrinsic value of Activision Blizzard, Inc - ATVI

Previous Close

$45.14

  Intrinsic Value

$11.37

stock screener

  Rating & Target

str. sell

-75%

Previous close

$45.14

 
Intrinsic value

$11.37

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of ATVI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 34.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.50
  15.35
  14.32
  13.38
  12.55
  11.79
  11.11
  10.50
  9.95
  9.46
  9.01
  8.61
  8.25
  7.92
  7.63
  7.37
  7.13
  6.92
  6.73
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
Revenue, $m
  8,738
  10,079
  11,521
  13,063
  14,702
  16,436
  18,262
  20,180
  22,188
  24,285
  26,474
  28,753
  31,124
  33,590
  36,153
  38,817
  41,585
  44,462
  47,452
  50,562
  53,797
  57,164
  60,670
  64,321
  68,128
  72,096
  76,237
  80,559
  85,071
  89,786
Variable operating expenses, $m
  7,099
  8,184
  9,352
  10,600
  11,926
  13,329
  14,807
  16,358
  17,983
  19,681
  21,423
  23,268
  25,187
  27,182
  29,257
  31,412
  33,652
  35,980
  38,400
  40,917
  43,535
  46,259
  49,096
  52,051
  55,132
  58,343
  61,694
  65,191
  68,843
  72,658
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  7,099
  8,184
  9,352
  10,600
  11,926
  13,329
  14,807
  16,358
  17,983
  19,681
  21,423
  23,268
  25,187
  27,182
  29,257
  31,412
  33,652
  35,980
  38,400
  40,917
  43,535
  46,259
  49,096
  52,051
  55,132
  58,343
  61,694
  65,191
  68,843
  72,658
Operating income, $m
  1,639
  1,894
  2,170
  2,464
  2,776
  3,107
  3,455
  3,821
  4,204
  4,605
  5,050
  5,485
  5,937
  6,408
  6,897
  7,405
  7,933
  8,482
  9,052
  9,645
  10,262
  10,905
  11,573
  12,270
  12,996
  13,753
  14,543
  15,367
  16,228
  17,128
EBITDA, $m
  1,971
  2,274
  2,599
  2,947
  3,317
  3,708
  4,120
  4,553
  5,006
  5,479
  5,973
  6,487
  7,022
  7,578
  8,156
  8,757
  9,382
  10,031
  10,705
  11,407
  12,137
  12,896
  13,687
  14,511
  15,370
  16,265
  17,199
  18,174
  19,192
  20,256
Interest expense (income), $m
  209
  144
  203
  265
  333
  405
  482
  563
  648
  738
  831
  929
  1,032
  1,138
  1,249
  1,364
  1,484
  1,609
  1,738
  1,872
  2,012
  2,158
  2,309
  2,466
  2,630
  2,801
  2,979
  3,164
  3,358
  3,560
  3,770
Earnings before tax, $m
  1,494
  1,692
  1,904
  2,131
  2,371
  2,626
  2,893
  3,173
  3,467
  3,773
  4,121
  4,453
  4,799
  5,159
  5,532
  5,921
  6,324
  6,744
  7,180
  7,633
  8,105
  8,596
  9,107
  9,640
  10,195
  10,775
  11,379
  12,010
  12,669
  13,357
Tax expense, $m
  403
  457
  514
  575
  640
  709
  781
  857
  936
  1,019
  1,113
  1,202
  1,296
  1,393
  1,494
  1,599
  1,708
  1,821
  1,938
  2,061
  2,188
  2,321
  2,459
  2,603
  2,753
  2,909
  3,072
  3,243
  3,421
  3,606
Net income, $m
  1,091
  1,235
  1,390
  1,556
  1,731
  1,917
  2,112
  2,317
  2,531
  2,754
  3,008
  3,251
  3,503
  3,766
  4,039
  4,322
  4,617
  4,923
  5,241
  5,572
  5,916
  6,275
  6,648
  7,037
  7,443
  7,865
  8,307
  8,767
  9,248
  9,751

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  18,953
  21,863
  24,992
  28,337
  31,892
  35,652
  39,614
  43,774
  48,129
  52,680
  57,426
  62,370
  67,514
  72,864
  78,424
  84,202
  90,206
  96,447
  102,934
  109,679
  116,697
  124,000
  131,604
  139,526
  147,782
  156,391
  165,373
  174,747
  184,537
  194,763
Adjusted assets (=assets-cash), $m
  18,953
  21,863
  24,992
  28,337
  31,892
  35,652
  39,614
  43,774
  48,129
  52,680
  57,426
  62,370
  67,514
  72,864
  78,424
  84,202
  90,206
  96,447
  102,934
  109,679
  116,697
  124,000
  131,604
  139,526
  147,782
  156,391
  165,373
  174,747
  184,537
  194,763
Revenue / Adjusted assets
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
Average production assets, $m
  6,789
  7,831
  8,952
  10,150
  11,424
  12,771
  14,190
  15,680
  17,240
  18,870
  20,570
  22,341
  24,183
  26,100
  28,091
  30,161
  32,312
  34,547
  36,871
  39,287
  41,800
  44,416
  47,140
  49,978
  52,935
  56,019
  59,236
  62,594
  66,100
  69,763
Working capital, $m
  -882
  -1,018
  -1,164
  -1,319
  -1,485
  -1,660
  -1,844
  -2,038
  -2,241
  -2,453
  -2,674
  -2,904
  -3,144
  -3,393
  -3,651
  -3,921
  -4,200
  -4,491
  -4,793
  -5,107
  -5,434
  -5,774
  -6,128
  -6,496
  -6,881
  -7,282
  -7,700
  -8,136
  -8,592
  -9,068
Total debt, $m
  3,755
  4,916
  6,165
  7,500
  8,918
  10,418
  11,999
  13,659
  15,397
  17,212
  19,106
  21,079
  23,131
  25,266
  27,484
  29,790
  32,185
  34,675
  37,264
  39,955
  42,755
  45,669
  48,703
  51,864
  55,158
  58,593
  62,177
  65,917
  69,823
  73,903
Total liabilities, $m
  7,562
  8,723
  9,972
  11,307
  12,725
  14,225
  15,806
  17,466
  19,204
  21,019
  22,913
  24,886
  26,938
  29,073
  31,291
  33,597
  35,992
  38,482
  41,071
  43,762
  46,562
  49,476
  52,510
  55,671
  58,965
  62,400
  65,984
  69,724
  73,630
  77,710
Total equity, $m
  11,391
  13,139
  15,020
  17,031
  19,167
  21,427
  23,808
  26,308
  28,926
  31,661
  34,513
  37,484
  40,576
  43,791
  47,133
  50,605
  54,214
  57,964
  61,863
  65,917
  70,135
  74,524
  79,094
  83,855
  88,817
  93,991
  99,389
  105,023
  110,906
  117,053
Total liabilities and equity, $m
  18,953
  21,862
  24,992
  28,338
  31,892
  35,652
  39,614
  43,774
  48,130
  52,680
  57,426
  62,370
  67,514
  72,864
  78,424
  84,202
  90,206
  96,446
  102,934
  109,679
  116,697
  124,000
  131,604
  139,526
  147,782
  156,391
  165,373
  174,747
  184,536
  194,763
Debt-to-equity ratio
  0.330
  0.370
  0.410
  0.440
  0.470
  0.490
  0.500
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.630
  0.630
  0.630
  0.630
Adjusted equity ratio
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601
  0.601

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,091
  1,235
  1,390
  1,556
  1,731
  1,917
  2,112
  2,317
  2,531
  2,754
  3,008
  3,251
  3,503
  3,766
  4,039
  4,322
  4,617
  4,923
  5,241
  5,572
  5,916
  6,275
  6,648
  7,037
  7,443
  7,865
  8,307
  8,767
  9,248
  9,751
Depreciation, amort., depletion, $m
  333
  379
  430
  483
  540
  601
  665
  731
  801
  874
  922
  1,002
  1,084
  1,170
  1,260
  1,353
  1,449
  1,549
  1,653
  1,762
  1,874
  1,992
  2,114
  2,241
  2,374
  2,512
  2,656
  2,807
  2,964
  3,128
Funds from operations, $m
  1,424
  1,614
  1,820
  2,039
  2,272
  2,518
  2,776
  3,048
  3,332
  3,629
  3,930
  4,253
  4,588
  4,936
  5,298
  5,675
  6,066
  6,472
  6,894
  7,334
  7,791
  8,267
  8,762
  9,278
  9,816
  10,377
  10,963
  11,574
  12,212
  12,879
Change in working capital, $m
  -125
  -135
  -146
  -156
  -166
  -175
  -184
  -194
  -203
  -212
  -221
  -230
  -240
  -249
  -259
  -269
  -280
  -291
  -302
  -314
  -327
  -340
  -354
  -369
  -384
  -401
  -418
  -436
  -456
  -476
Cash from operations, $m
  1,548
  1,750
  1,965
  2,195
  2,437
  2,693
  2,961
  3,242
  3,535
  3,841
  4,151
  4,483
  4,827
  5,185
  5,557
  5,944
  6,345
  6,763
  7,197
  7,648
  8,118
  8,607
  9,116
  9,647
  10,201
  10,778
  11,381
  12,011
  12,668
  13,355
Maintenance CAPEX, $m
  -261
  -304
  -351
  -401
  -455
  -512
  -573
  -636
  -703
  -773
  -846
  -922
  -1,002
  -1,084
  -1,170
  -1,260
  -1,353
  -1,449
  -1,549
  -1,653
  -1,762
  -1,874
  -1,992
  -2,114
  -2,241
  -2,374
  -2,512
  -2,656
  -2,807
  -2,964
New CAPEX, $m
  -964
  -1,042
  -1,121
  -1,198
  -1,273
  -1,347
  -1,419
  -1,490
  -1,560
  -1,630
  -1,700
  -1,771
  -1,843
  -1,916
  -1,992
  -2,070
  -2,151
  -2,235
  -2,324
  -2,416
  -2,514
  -2,616
  -2,724
  -2,837
  -2,957
  -3,084
  -3,217
  -3,358
  -3,506
  -3,663
Cash from investing activities, $m
  -1,225
  -1,346
  -1,472
  -1,599
  -1,728
  -1,859
  -1,992
  -2,126
  -2,263
  -2,403
  -2,546
  -2,693
  -2,845
  -3,000
  -3,162
  -3,330
  -3,504
  -3,684
  -3,873
  -4,069
  -4,276
  -4,490
  -4,716
  -4,951
  -5,198
  -5,458
  -5,729
  -6,014
  -6,313
  -6,627
Free cash flow, $m
  323
  403
  493
  595
  709
  833
  969
  1,115
  1,272
  1,437
  1,605
  1,790
  1,983
  2,185
  2,395
  2,614
  2,842
  3,078
  3,324
  3,578
  3,842
  4,116
  4,401
  4,696
  5,002
  5,321
  5,652
  5,996
  6,355
  6,728
Issuance/(repayment) of debt, $m
  1,084
  1,161
  1,249
  1,335
  1,418
  1,500
  1,581
  1,660
  1,738
  1,816
  1,894
  1,973
  2,053
  2,134
  2,218
  2,305
  2,396
  2,490
  2,588
  2,692
  2,800
  2,914
  3,034
  3,161
  3,294
  3,435
  3,584
  3,740
  3,906
  4,080
Issuance/(repurchase) of shares, $m
  526
  514
  491
  455
  405
  343
  269
  183
  87
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,610
  1,675
  1,740
  1,790
  1,823
  1,843
  1,850
  1,843
  1,825
  1,816
  1,894
  1,973
  2,053
  2,134
  2,218
  2,305
  2,396
  2,490
  2,588
  2,692
  2,800
  2,914
  3,034
  3,161
  3,294
  3,435
  3,584
  3,740
  3,906
  4,080
Total cash flow (excl. dividends), $m
  1,934
  2,078
  2,233
  2,384
  2,532
  2,677
  2,819
  2,958
  3,096
  3,253
  3,499
  3,762
  4,035
  4,319
  4,614
  4,920
  5,238
  5,568
  5,912
  6,270
  6,642
  7,030
  7,435
  7,856
  8,297
  8,756
  9,236
  9,737
  10,261
  10,808
Retained Cash Flow (-), $m
  -1,617
  -1,749
  -1,881
  -2,010
  -2,137
  -2,260
  -2,381
  -2,500
  -2,618
  -2,735
  -2,853
  -2,971
  -3,092
  -3,215
  -3,342
  -3,473
  -3,609
  -3,750
  -3,899
  -4,054
  -4,217
  -4,389
  -4,570
  -4,761
  -4,962
  -5,174
  -5,398
  -5,634
  -5,883
  -6,146
Prev. year cash balance distribution, $m
  1,583
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1,900
  329
  352
  374
  396
  417
  438
  458
  479
  518
  646
  791
  944
  1,104
  1,272
  1,447
  1,629
  1,818
  2,013
  2,216
  2,425
  2,641
  2,865
  3,096
  3,335
  3,582
  3,838
  4,103
  4,377
  4,662
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,821
  301
  306
  308
  307
  303
  296
  287
  275
  272
  307
  338
  359
  371
  373
  368
  354
  335
  310
  282
  251
  219
  188
  158
  130
  104
  82
  63
  48
  35
Current shareholders' claim on cash, %
  98.3
  96.8
  95.6
  94.7
  94.0
  93.4
  93.0
  92.8
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7
  92.7

Activision Blizzard, Inc. is a developer and publisher of interactive entertainment content and services. The Company develops and distributes content and services across various gaming platforms, including video game consoles, personal computers (PC) and mobile devices. Its segments include Activision Publishing, Inc. (Activision), Blizzard Entertainment, Inc. (Blizzard), King Digital Entertainment (King) and Other. Activision is a developer and publisher of interactive software products and content. Blizzard is engaged in developing and publishing of interactive software products and entertainment content, particularly in PC gaming. King is a mobile entertainment company. It is engaged in other businesses, including The Major League Gaming (MLG) business; The Activision Blizzard Studios (Studios) business, and The Activision Blizzard Distribution (Distribution) business. It also develops products spanning other genres, including action/adventure, role-playing and simulation.

FINANCIAL RATIOS  of  Activision Blizzard, Inc (ATVI)

Valuation Ratios
P/E Ratio 34.8
Price to Sales 5.1
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 15.6
Price to Free Cash Flow 16.7
Growth Rates
Sales Growth Rate 41.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 22.5%
Cap. Spend. - 3 Yr. Gr. Rate 12.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.3
LT Debt to Equity 53.6%
Total Debt to Equity 53.6%
Interest Coverage 6
Management Effectiveness
Return On Assets 7%
Ret/ On Assets - 3 Yr. Avg. 7%
Return On Total Capital 7.4%
Ret/ On T. Cap. - 3 Yr. Avg. 7.4%
Return On Equity 11.2%
Return On Equity - 3 Yr. Avg. 11.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 63.8%
Gross Margin - 3 Yr. Avg. 65.1%
EBITDA Margin 37.3%
EBITDA Margin - 3 Yr. Avg. 36.9%
Operating Margin 20%
Oper. Margin - 3 Yr. Avg. 25%
Pre-Tax Margin 16.7%
Pre-Tax Margin - 3 Yr. Avg. 21%
Net Profit Margin 14.6%
Net Profit Margin - 3 Yr. Avg. 17.6%
Effective Tax Rate 12.7%
Eff/ Tax Rate - 3 Yr. Avg. 16%
Payout Ratio 20.2%

ATVI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATVI stock intrinsic value calculation we used $7500 million for the last fiscal year's total revenue generated by Activision Blizzard, Inc. The default revenue input number comes from 0001 income statement of Activision Blizzard, Inc. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATVI stock valuation model: a) initial revenue growth rate of 16.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ATVI is calculated based on our internal credit rating of Activision Blizzard, Inc, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Activision Blizzard, Inc.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATVI stock the variable cost ratio is equal to 81.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ATVI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Activision Blizzard, Inc.

Corporate tax rate of 27% is the nominal tax rate for Activision Blizzard, Inc. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATVI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATVI are equal to 77.7%.

Life of production assets of 22.3 years is the average useful life of capital assets used in Activision Blizzard, Inc operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATVI is equal to -10.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11357 million for Activision Blizzard, Inc - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 763.836 million for Activision Blizzard, Inc is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Activision Blizzard, Inc at the current share price and the inputted number of shares is $34.5 billion.

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