Activision Blizzard (NASDAQ:ATVI) and New Relic (NYSE:NEWR) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.
Risk & Volatility
Activision Blizzard has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, New Relic has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.
This table compares Activision Blizzard and New Relic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations and price targets for Activision Blizzard and New Relic, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Activision Blizzard presently has a consensus target price of $60.46, suggesting a potential upside of 10.27%. New Relic has a consensus target price of $81.38, suggesting a potential upside of 19.63%. Given New Relic’s higher probable upside, analysts clearly believe New Relic is more favorable than Activision Blizzard.
Valuation & Earnings
This table compares Activision Blizzard and New Relic’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Activision Blizzard||$7.50 billion||5.62||$1.81 billion||$2.39||22.94|
|New Relic||$479.23 million||8.34||-$40.89 million||($0.31)||-219.42|
Activision Blizzard has higher revenue and earnings than New Relic. New Relic is trading at a lower price-to-earnings ratio than Activision Blizzard, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
88.6% of Activision Blizzard shares are held by institutional investors. Comparatively, 81.4% of New Relic shares are held by institutional investors. 1.3% of Activision Blizzard shares are held by insiders. Comparatively, 17.4% of New Relic shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Activision Blizzard pays an annual dividend of $0.37 per share and has a dividend yield of 0.7%. New Relic does not pay a dividend. Activision Blizzard pays out 15.5% of its earnings in the form of a dividend.
Activision Blizzard beats New Relic on 12 of the 17 factors compared between the two stocks.
Activision Blizzard Company Profile
Activision Blizzard, Inc. develops and distributes content and services on video game consoles, personal computers (PC), and mobile devices. The company operates through three segments: Activision Publishing, Inc.; Blizzard Entertainment, Inc.; and King Digital Entertainment. It develops, publishes, and sells interactive software products and entertainment content for the console and PC platforms through retail and digital channels, including subscription, full-game, and in-game sales, as well as by licensing software to third-party or related-party companies; and offers downloadable content. The company also maintains a proprietary online gaming service, Battle.net that facilitates the creation of user generated content, digital distribution, and online social connectivity in its games; and develops and publishes interactive entertainment content and services primarily on mobile platforms, such as Android and iOS, as well as distributes its content and services on the PC platform primarily through Facebook. In addition, it engages in creating original film and television content; and provides warehousing, logistics, and sales distribution services to third-party publishers of interactive entertainment software, as well as manufacturers of interactive entertainment hardware products. The company’s products include various genres, including first-person shooter, action/adventure, role-playing, strategy, and others. It serves retailers and distributors, including mass-market retailers, first party digital storefronts, consumer electronics stores, discount warehouses, and game specialty stores through third-party distribution and licensing arrangements in the United States, Australia, Brazil, Canada, China, France, Germany, Ireland, Italy, Japan, Malta, Mexico, the Netherlands, Romania, Singapore, South Korea, Spain, Sweden, Taiwan, and the United Kingdom. The company was incorporated in 1979 and is headquartered in Santa Monica, California.
New Relic Company Profile
New Relic, Inc., a software-as-a-service company, provides various digital products worldwide. Its cloud-based platform and suite of products include New Relic Platform, which enable organizations to collect, store, and analyze data. The company offers New Relic Application Performance Management that provides visibility into the performance and usage of server-based applications, such as data pertaining to response time, transaction throughput, error rates, top transactions, and user satisfaction; New Relic Mobile, which provides code-level visibility into the performance and health of mobile applications running on the iOS and Android mobile operating systems; and New Relic Browser that monitors the page view experiences of actual end-users for desktop and mobile browser-based applications. It also provides New Relic Synthetics, which simulates usage and reproduces business-critical functionality that enables its users to test their software throughout the entire development life cycle; New Relic Infrastructure that provides a view of the health and configuration changes for an enterprise’s entire host ecosystem across various environments; and New Relic Insights that enables technology and business users to perform real-time analysis. In addition, the company offers New Relic Applied Intelligence platform; New Relic’s alerting platform, a centralized notification system that delivers alerts from across the products that make up the New Relic Platform; and New Relic’s plugins architecture, which offers a plugin architecture, including application programming interfaces and software development kits for customers and partners to embed and extend its solution into their products. The company sells its products through direct sales organizations, online and offline sales, and marketing activities. New Relic, Inc. was founded in 2007 and is headquartered in San Francisco, California.
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