Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Balance Sheet: Assets
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- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Reportable Segments
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2008
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- Analysis of Debt
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Current Valuation Ratios
Activision Blizzard Inc., current price multiples
| Activision Blizzard Inc. | Alphabet Inc. | Comcast Corp. | Meta Platforms Inc. | Netflix Inc. | Take-Two Interactive Software Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||
| Current share price (P) | ||||||||||||
| No. shares of common stock outstanding | ||||||||||||
| Growth rate (g) | ||||||||||||
| Earnings per share (EPS) | ||||||||||||
| Next year expected EPS | ||||||||||||
| Operating profit per share | ||||||||||||
| Sales per share | ||||||||||||
| Book value per share (BVPS) | ||||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||||
| Price to earnings (P/E) | ||||||||||||
| Price to next year expected earnings | ||||||||||||
| Price-earnings-growth (PEG) | ||||||||||||
| Price to operating profit (P/OP) | ||||||||||||
| Price to sales (P/S) | ||||||||||||
| Price to book value (P/BV) | ||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Activision Blizzard Inc., historical price multiples
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
- Price to earnings (P/E) ratio
- The P/E ratio exhibits a fluctuating upward trend over the five-year period. Starting at 17.75 in 2018, it increased significantly to a peak of 34 in 2020, then declined to 23.51 in 2021 before rising sharply again to 39.95 in 2022. This indicates increasing market expectations of future earnings growth, despite some volatility.
- Price to operating profit (P/OP) ratio
- The P/OP ratio followed a similar pattern to the P/E ratio, beginning at 16.19 in 2018, rising through 2019 and 2020 to a high of 27.92 and 27.32 respectively. It then dropped to 19.47 in 2021, before rising steeply to 36.19 in 2022. This suggests fluctuating but generally increasing valuation multiples relative to operating profitability, implying varying investor optimism about operating earnings.
- Price to sales (P/S) ratio
- This ratio showed a consistent upward trend from 4.29 in 2018 to 9.24 in 2020, followed by a slight decrease to 7.21 in 2021 and a modest recovery to 8.03 in 2022. While the valuation relative to sales generally increased, the dip in 2021 indicates some temporary moderation in market pricing against revenue.
- Price to book value (P/BV) ratio
- The P/BV ratio rose progressively from 2.83 in 2018 to 4.97 in 2020, suggesting a growing premium over book value. However, it declined to 3.61 in 2021 and decreased further to 3.14 in 2022, indicating a reduction in market valuation relative to the company's net asset value over the last two years analyzed.
Price to Earnings (P/E)
Activision Blizzard Inc., historical P/E 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/E Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/E Ratio, Industry | ||||||
| Communication Services | ||||||
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.
2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Activision Blizzard Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend between 2018 and 2020, increasing substantially from $42.14 to $96.42. However, after reaching this peak in 2020, the share price declined over the following two years, falling to $81.44 in 2021 and further to $77.07 in 2022.
- Earnings Per Share (EPS)
- EPS showed a fluctuating pattern during the period. After a decrease from $2.37 in 2018 to $1.95 in 2019, EPS rebounded to $2.84 in 2020 and further increased to a high of $3.46 in 2021. However, this positive momentum reversed in 2022, with EPS falling sharply to $1.93, a level close to that of 2019.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio demonstrated considerable volatility over the period. It increased significantly from 17.75 in 2018 to 29.85 in 2019, peaking at 34.00 in 2020. The ratio decreased to 23.51 in 2021, despite the increase in EPS, and then rose sharply again to 39.95 in 2022, reflecting a divergence between share price and earnings as EPS declined.
- Summary of Trends
- Overall, the data reveals that the company experienced rising valuations and earnings growth through 2020 and 2021. However, 2022 marked a downturn in earnings accompanied by a modest decline in share price, resulting in an elevated P/E ratio, which suggests that the market priced the stock at a higher earnings multiple despite weakening profitability. This may indicate investor expectations of future improvement or other market factors influencing valuation independently of current earnings performance.
Price to Operating Profit (P/OP)
Activision Blizzard Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/OP Ratio, Industry | ||||||
| Communication Services | ||||||
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.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Activision Blizzard Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The data reveals several key financial trends over the five-year period analyzed. The share price exhibited a generally upward trajectory from 2018 through 2020, reaching its peak in 2020 at 96.42 US dollars. However, from 2021 onwards, the share price declined, settling at 77.07 US dollars by the end of 2022. This indicates a period of optimism followed by a retraction in market valuation.
Operating profit per share demonstrated some variability. Starting at 2.6 US dollars in 2018, it decreased to 2.09 US dollars in 2019, then significantly increased to 3.53 US dollars in 2020 and continued rising to 4.18 US dollars in 2021. However, in 2022, there was a sharp decline to 2.13 US dollars, slightly above the 2019 level but well below the peak of 2021. This fluctuation reflects changing profitability dynamics over the years.
The price-to-operating profit ratio (P/OP) further highlights shifting market perceptions relative to earnings. It rose markedly from 16.19 in 2018 to a high of 27.92 in 2019 and remained at an elevated level of 27.32 in 2020. Subsequently, it dropped to 19.47 in 2021, coinciding with higher operating profit per share, suggesting improved earnings supported market valuations more closely in that year. The ratio surged sharply to 36.19 in 2022, despite the reduction in operating profit per share, indicating increased market expectations or possibly overvaluation relative to operating earnings during that period.
- Share Price Trend
- Increased significantly from 2018 to 2020, followed by a decline through 2022.
- Operating Profit per Share Performance
- Experienced declines and growth phases, peaking in 2021 before dropping sharply in 2022.
- P/OP Ratio Behavior
- Generally rose through 2019 and 2020, dropped in 2021, and then increased sharply in 2022, suggesting varying market valuation relative to profitability.
Overall, the data reflects a period of growth in both share price and operating profit per share until 2020-2021, followed by a contraction in profitability and mixed signals in market valuation metrics in 2022. The significant increase in P/OP ratio at the end of the period warrants further investigation into market expectations and underlying business conditions influencing investor sentiment.
Price to Sales (P/S)
Activision Blizzard Inc., historical P/S 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Net revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/S Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/S Ratio, Industry | ||||||
| Communication Services | ||||||
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.
2 2022 Calculation
Sales per share = Net revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Activision Blizzard Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a significant upward trend from 2018 to 2020, increasing from 42.14 US dollars to a peak of 96.42 US dollars. Subsequently, there was a decline in 2021 and 2022, with the price falling to 81.44 US dollars and then further to 77.07 US dollars. Despite the decrease in the last two years, the share price in 2022 remained substantially higher compared to 2018 and 2019 levels.
- Sales per Share
- Sales per share exhibited some fluctuation during the period. It declined from 9.82 US dollars in 2018 to 8.44 US dollars in 2019, marking a drop in revenue per share. However, this figure rebounded strongly in 2020 and 2021, reaching a high of 11.3 US dollars in 2021. The value then decreased in 2022 to 9.6 US dollars, indicating reduced sales performance compared to the prior two years but still above the 2019 base.
- Price-to-Sales (P/S) Ratio
- The P/S ratio increased markedly from 4.29 in 2018 to 9.24 in 2020, reflecting growing investor valuation relative to sales. This ratio then declined to 7.21 in 2021 but rose again to 8.03 in 2022. Overall, the P/S ratio remained elevated in the latter years, suggesting persistent market optimism about the company's future sales despite the observed fluctuations in share price and sales per share.
Price to Book Value (P/BV)
Activision Blizzard Inc., historical P/BV 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/BV Ratio, Industry | ||||||
| Communication Services | ||||||
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.
2 2022 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Activision Blizzard Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price showed a significant upward trend from 2018 to 2020, increasing from $42.14 to $96.42. However, after peaking in 2020, the share price declined to $81.44 in 2021 and further decreased to $77.07 in 2022. This indicates a period of strong growth followed by a correction or downturn in the subsequent two years.
- Book Value per Share (BVPS)
- The book value per share demonstrated a consistent year-over-year increase throughout the five-year period. Starting at $14.87 in 2018, it rose steadily to $24.54 by 2022. This steady increase reflects growing net asset value attributed to the company on a per-share basis, suggesting improving underlying fundamentals.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio initially increased from 2.83 in 2018 to a high of 4.97 in 2020, aligning with the peak in the share price. After 2020, the ratio declined to 3.61 in 2021 and further to 3.14 in 2022, indicating that the market valuation relative to the book value became more conservative. While the book value per share increased continuously, the price appreciation was not sustained, leading to the decreasing ratio.