Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Activision Blizzard Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial trajectory between 2018 and 2022 reflects a period of significant expansion in cash generation, followed by a phase of moderate stabilization. While core operating cash flows remained consistently positive and grew steadily over the majority of the period, free cash flow to equity exhibited higher volatility and a distinct peak in 2020.
- Net Cash Provided by Operating Activities
- Operating cash flow demonstrated a consistent growth trend from 2018 to 2021, rising from 1,790 million to a peak of 2,414 million. A slight contraction occurred in 2022, with the figure adjusting to 2,220 million, indicating a stable capacity to generate cash from primary business operations.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE experienced a sharp recovery and subsequent expansion, moving from a deficit of 106 million in 2018 to a substantial surplus of 1,715 million in 2019. The metric reached its maximum value of 3,070 million in 2020 before entering a gradual decline, ending the period at 2,129 million in 2022.
- Comparative Cash Flow Analysis
- A significant divergence is observed in 2018, where positive operating cash flow failed to yield positive FCFE, suggesting substantial capital expenditures or net debt repayments. In contrast, 2020 represents a notable anomaly where FCFE exceeded net cash from operating activities, indicating potential net debt issuance or other non-operating cash inflows that bolstered equity-available cash.
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Price to FCFE Ratio, Current
Activision Blizzard Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 786,798,320 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,129) |
| FCFE per share | 2.71 |
| Current share price (P) | 92.76 |
| Valuation Ratio | |
| P/FCFE | 34.28 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Alphabet Inc. | 39.58 |
| Comcast Corp. | 4.58 |
| Meta Platforms Inc. | 26.06 |
| Netflix Inc. | 38.84 |
| Walt Disney Co. | 28.39 |
| P/FCFE, Sector | |
| Media & Entertainment | 67.19 |
| P/FCFE, Industry | |
| Communication Services | 81.07 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Activision Blizzard Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 784,274,126 | 779,234,888 | 774,753,965 | 769,221,524 | 763,833,873 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,129) | 2,334) | 3,070) | 1,715) | (106) | |
| FCFE per share3 | 2.71 | 3.00 | 3.96 | 2.23 | -0.14 | |
| Share price1, 4 | 77.07 | 81.44 | 96.42 | 58.33 | 42.14 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 28.39 | 27.19 | 24.33 | 26.16 | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Alphabet Inc. | 22.91 | 29.75 | — | — | — | |
| Comcast Corp. | 12.26 | 27.57 | — | — | — | |
| Meta Platforms Inc. | 17.26 | 16.84 | — | — | — | |
| Netflix Inc. | 176.92 | — | — | — | — | |
| Walt Disney Co. | — | — | 18.20 | — | — | |
| P/FCFE, Sector | ||||||
| Media & Entertainment | 23.67 | 29.77 | — | — | — | |
| P/FCFE, Industry | ||||||
| Communication Services | 31.86 | 26.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,129,000,000 ÷ 784,274,126 = 2.71
4 Closing price as at the filing date of Activision Blizzard Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 77.07 ÷ 2.71 = 28.39
6 Click competitor name to see calculations.
An analysis of the financial metrics between 2018 and 2022 reveals a period of significant volatility in share price and free cash flow to equity (FCFE), followed by a stabilization in the valuation multiple.
- Share Price and FCFE Dynamics
- A substantial growth phase occurred between 2018 and 2020, with the share price increasing from 42.14 US$ to a peak of 96.42 US$. This trend was mirrored by FCFE per share, which transitioned from a negative value of -0.14 US$ in 2018 to a peak of 3.96 US$ in 2020. Following this peak, both metrics entered a period of gradual decline through 2022, with the share price closing at 77.07 US$ and FCFE per share at 2.71 US$.
- P/FCFE Ratio Trends
- The P/FCFE ratio remained relatively stable from 2019 to 2022, oscillating within a narrow range between 24.33 and 28.39. After a slight dip in 2020, a consistent upward trend in the ratio is observed from 2020 to 2022. This suggests that the share price decreased at a slower rate than the FCFE per share during the latter part of the period, resulting in a higher valuation multiple despite the decline in absolute cash flow.
- Valuation Anomalies
- The absence of a P/FCFE ratio for the 2018 period is attributed to negative FCFE per share, which renders the ratio mathematically non-meaningful for valuation purposes. The subsequent shift to positive FCFE in 2019 established a baseline for the valuation multiples observed in the following years.
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