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Fall 2018 is going to be a treat for gamers following Activision Blizzard Inc.’s (NASDAQ:ATVI) reveal that the highly anticipated sequel of the Call of Duty (COD) franchise Call of Duty: Black Ops 4 will be released on Oct 12.
Per the Street, the game will be released two weeks ahead of another awaited game Take Two Interactive’s (NASDAQ:TTWO) Red Dead Redemption 2. Electronic Arts (NASDAQ:EA) is also expected to release Battlefield 5 around the same time.
Shares of Activision rallied to a new 52-week high of $76.91 following the revelation. The shares spiked 3.70% to close at $76.81 on Mar 8.
Notably, the stock has returned 56.1% in the past year, substantially better than the industry’s rally of 16.2%.
Currently, Activision carries a Zacks Rank #3 (Hold).
Call of Duty: Activision’s Cash Cow
Call of Duty is one of the biggest growth drivers for Activision. Notably, Call of Duty: World War II was the top-selling console video game in 2017 globally.
In the last-quarter, Activision garnered 55 million monthly active users (MAUs) up 12% sequentially. This increase can primarily be attributed to Call of Duty: WWII and Destiny 2.
Revenues (including deferrals) of $2.64 billion surpassed the Zacks Consensus Estimate of $2.61 billion. Excluding deferral revenues, Activision reported sales of $2.043 billion, up 20.2% year over year.
Expanding Franchises
Activision has eight $1 billion franchises including Call of Duty. Destiny 2 was the second-highest selling console game in North America in 2017.
Moreover, expanding franchise portfolio that includes offerings like StarCraft, World of Warcraft, Diablo, Hearthstone and Heroes of the Storm will drive growth in the long haul.
Additionally, the company is strengthening i presence in the lucrative e-sports market. Notably, Overwatch League had a scintillating start with more than 10 million viewers watching the event in the first week of the inaugural season. We note that the launch of Overwatch League is driving viewership, corporate sponsorships and media coverage for Activision.
Stock to Consider
Facebook (NASDAQ:FB) is a stock worth considering in the broader technology sector. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Facebook is currently pegged at 26.51%.
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