As of June 19, 2025, Activision Blizzard Inc's estimated intrinsic value ranges from $56.58 to $99.39 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $96.75 | +2.5% |
| Discounted Cash Flow (5Y) | $81.90 | -13.3% |
| Dividend Discount Model (Multi-Stage) | $59.42 | -37.1% |
| Dividend Discount Model (Stable) | $99.39 | +5.3% |
| Earnings Power Value | $56.58 | -40.1% |
Is Activision Blizzard Inc (ATVI) undervalued or overvalued?
With the current market price at $94.42, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Activision Blizzard Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.58 | 0.62 |
| Cost of equity | 6.5% | 8.4% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 14.1% | 15.2% |
| Debt/Equity ratio | 0.05 | 0.05 |
| After-tax WACC | 6.4% | 8.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $82 | $57,278M | 86.6% |
| 10-Year Growth | $97 | $68,965M | 75.7% |
| 5-Year EBITDA | $72 | $49,834M | 84.6% |
| 10-Year EBITDA | $86 | $60,875M | 72.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,673M |
| Discount Rate (WACC) | 8.1% - 6.4% |
| Enterprise Value | $32,811M - $41,909M |
| Net Debt | $(7,158)M |
| Equity Value | $39,969M - $49,067M |
| Outstanding Shares | 787M |
| Fair Value | $51 - $62 |
| Selected Fair Value | $56.58 |
| Metric | Value |
|---|---|
| Market Capitalization | $74290M |
| Enterprise Value | $67132M |
| Trailing P/E | 34.31 |
| Forward P/E | 42.92 |
| Trailing EV/EBITDA | 21.20 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 9.10% |
| Debt-to-Equity Ratio | 0.05 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $29.03 |
| Discounted Cash Flow (5Y) | 25% | $20.47 |
| Dividend Discount Model (Multi-Stage) | 20% | $11.88 |
| Dividend Discount Model (Stable) | 15% | $14.91 |
| Earnings Power Value | 10% | $5.66 |
| Weighted Average | 100% | $81.95 |
Based on our comprehensive valuation analysis, Activision Blizzard Inc's weighted average intrinsic value is $81.95, which is approximately 13.2% below the current market price of $94.42.
Key investment considerations:
Given these factors, we believe Activision Blizzard Inc is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.