ATVI – Market expectations are for record-high Uniform ROA, but management has concerns about growth, investments, and earnings

• • • Activision Blizzard, Inc. (ATVI:USA)currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 21.2x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about growth, investments, and earnings
    • Specifically, management may have concerns about their professional Overwatch league, and may lack confidence in the sustainability of improvements in monthly active user growth, particularly regarding Hearthstone. Furthermore, they may be exaggerating the opportunities they see for their owned MLG platform, and may lack confidence in the longer-term potential of their mobile investments. Moreover, they may lack confidence in the sustainability of EPS growth ahead of guidance, and may have concerns about their ability to methodically develop capabilities and infrastructure to build their Ads business in 2018