Changyou.com Limited (CYOU) vs. Activision Blizzard (ATVI) Head to Head Review

Changyou.com Limited (NASDAQ: CYOU) and Activision Blizzard (NASDAQ:ATVI) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitabiliy, risk, valuation, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

25.3% of Changyou.com Limited shares are owned by institutional investors. Comparatively, 87.4% of Activision Blizzard shares are owned by institutional investors. 2.1% of Activision Blizzard shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Changyou.com Limited and Activision Blizzard’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Changyou.com Limited N/A N/A N/A $2.68 14.36
Activision Blizzard $6.88 billion 6.39 $2.26 billion $1.32 44.20

Activision Blizzard has higher revenue and earnings than Changyou.com Limited. Changyou.com Limited is trading at a lower price-to-earnings ratio than Activision Blizzard, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Changyou.com Limited has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Activision Blizzard has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Profitability

This table compares Changyou.com Limited and Activision Blizzard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Changyou.com Limited 27.65% 12.44% 8.47%
Activision Blizzard 14.63% 16.90% 8.76%

Dividends

Activision Blizzard pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. Changyou.com Limited does not pay a dividend. Activision Blizzard pays out 22.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Changyou.com Limited and Activision Blizzard, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Changyou.com Limited 1 5 2 0 2.13
Activision Blizzard 1 3 18 0 2.77

Changyou.com Limited currently has a consensus target price of $26.18, suggesting a potential downside of 32.00%. Activision Blizzard has a consensus target price of $57.86, suggesting a potential downside of 0.83%. Given Activision Blizzard’s stronger consensus rating and higher possible upside, analysts clearly believe Activision Blizzard is more favorable than Changyou.com Limited.

Summary

Activision Blizzard beats Changyou.com Limited on 9 of the 13 factors compared between the two stocks.

About Changyou.com Limited

Changyou.com Limited is an online game developer and operator. The Company is engaged in the development, operation and licensing of online games for personal computers (PCs) and mobile devices. The Company’s segments include Online Game segment, which consists primarily of PC games and mobile games; the Platform Channel segment, which consists primarily of online advertising services offered on the 17173.com Website, Internet value-added services (IVAS) offered on the Dolphin Browser and RaidCall and online card and board games offered by MoboTap, and the Cinema Advertising segment, which consists primarily of the acquisition, from operators of movie theaters, and the sale, to advertisers, of pre-film advertising slots, which are advertisements shown before the screening of a movie in a cinema theater. Its online games include a range of genres, including massively multi-player online role-playing games (MMORPGs), third person shooter games (TPSs) and collectible card games (CCGs).

About Activision Blizzard

Activision Blizzard, Inc. is a developer and publisher of interactive entertainment content and services. The Company develops and distributes content and services across various gaming platforms, including video game consoles, personal computers (PC) and mobile devices. Its segments include Activision Publishing, Inc. (Activision), Blizzard Entertainment, Inc. (Blizzard), King Digital Entertainment (King) and Other. Activision is a developer and publisher of interactive software products and content. Blizzard is engaged in developing and publishing of interactive software products and entertainment content, particularly in PC gaming. King is a mobile entertainment company. It is engaged in other businesses, including The Major League Gaming (MLG) business; The Activision Blizzard Studios (Studios) business, and The Activision Blizzard Distribution (Distribution) business. It also develops products spanning other genres, including action/adventure, role-playing and simulation.

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