ATVI – Market expectations are for continued ROA compression, and management may be concerned about growth, ad revenue, and active users

• Activision Blizzard, Inc. (ATVI:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 23.8x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about growth, mobile ad revenue, and active users
• Specifically, management may be concerned about the sustainability of recent sales growth and further increases to operating expenses. Additionally, they may lack confidence in their ability to sustain Call of Duty active user levels, and they may be concerned about the effectiveness of their World of Warcraft Classic marketing. Moreover, they may lack confidence in their ability to maintain their mobile market dominance with Candy Crush, and they may lack confidence in their ability to successfully develop independent IPs outside of their existing portfolio. Finally, they may be concerned about technical challenges related to the launch of World of Warcraft Classic, and they may lack confidence in their ability to continue growing ad revenue within their King portfolio.