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Battle Of The Stocks: Electronic Arts Vs Activision Blizzard

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In our fourth edition of the Battle Of The Stocks, we size up two domestic gaming giants: Electronic Arts [EA] and Activision Blizzard [ATVI]. These behemoths account for a significant portion of the gaming market share in the United States.

The United States’ gaming market has been valued at $30.4B in the trailing 12 months prior to June this year. Comparatively, EA has reported sales of $5.1B while ATVI has sales of $7.2B in the same period. These two firm’s accounted for over 40% of total gaming revenue in the United States.

EA and ATVI have created significant investor wealth over the past few years. Activision Blizzard’s shares have generated absolute returns of 340% while EA stock has risen 348% in the last five years.

But historical gains are not an indicator of future performance. Let us look at the key financial metrics between the two companies and compare them to see which is a better buy at current levels.

Market Cap

Driven by the massive increase in share prices, the market cap or market value of Electronic Arts and Activision have gained significantly over the last few years.

Shares of EA have risen 57% over the last three years and is up 4.2% this year. Comparatively, the ATVI stock has gained 133% in the last three years and up 48% in 2018.

EA’s market cap is currently $33B while Activision’s market cap is higher at $59B.

Revenue Growth

Revenue growth is a key indicator to gauge the financial position of any company. Any firm that can grow its revenue will be worth investing in. EA reported sales of 5.18B in fiscal 2018. Analysts expect EA’s revenue to grow 1.9% to $5.28B next year, 9.7% to 5.8B in 2020 and 6% to $6.12B in 2021.

Activision Blizzard reported sales of $7.16B last year. According to analysts, the company is estimated to grow sales by almost 7.4% in 2020.

WINNER: Activision Blizzard

Profitability

The significant rise in digital and mobile gaming has driven profit margins of companies higher. The high gross margin translates into robust bottom-lines for companies.

EA’s operating margin is expected to be 35% in 2019. ATVI’s estimated profit margin is estimated to be higher at 36% in 2019.

WINNER: A Tie

Earnings Growth

While the two companies are looking to improve profit margins, analysts and investors are concerned over the earnings growth potential.

Analysts expect EA’s earnings per share (EPS) to grow 14.3% over the next five years. Comparatively, analysts expect Activision’s earnings to rise 15.2% over the next five years.

WINNER: Activision Blizzard

Analyst estimates

We have looked at key financial metrics for the two stocks. Let us now see what Wall Street analysts expect from the two companies. Analysts have a 12-month average target price of $141.15 for EA, indicating an upside potential of 29%.

Comparatively, analysts expect ATVI’s share price to rise to $81.11, providing an upside potential of 4.5% over the next year.

WINNER:Ā Electronic Arts

The scorecard is slightly in favor of Activision at 2-1. However, with the gaming industry set to experience revenue growth over the next few years, both the companies are likely to benefit.

Activision pips EA slightly with its extensive gaming portfolio and expertise in eSports. Activision Blizzard, in fact, created the first competitive global eSports league earlier this year.

Wealthlab Verdict:Ā Ā Activision Blizzard (2-1)

Business

How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) šŸ‘€

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I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.

I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.

(Real estate—our TEMPLE I and TEMPLE II projects included—has a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)

There’s the 1031 exchange, of course, which I’ve shared with you guys before. 

Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.

But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.

So I thought I’d share it with you guys. šŸ’Ž

You can check it out here.

Let me know what you think. šŸ˜Ž

PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. šŸ‘€
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.

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Business

How I run a $300M+ business from the beach…(and how you can TOO!)

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Yes, you read that right.

If there’s anything the pandemic taught us, it’s that the paradigm of ā€œofficeā€ and ā€œworkspaceā€ has been shaken to its CORE.

Universities are teaching via Zoom, court dates are done virtually, FULLY REMOTE businesses are valued at $1B+, and legitimate Inc. 5000 startups are run from…wherever. šŸ“²

This is my office for the day…

I am actually running our business from the beach, typing this from here.

It’s 4:28 pm CET, which means it’s 10:28 am EST and I am CRUSHING my to-do list.

(And the team will continue to crush it while I’m asleep. That’s the šŸ—)

So how did we get here?Ā 

We launched NYCE and our mission to create 100,000 millionaires in March, 2020…just as the global COVID-19 lockdown happened. 😳

As a result, we shut down our main office and set EVERYTHING up to run remotely…

SMOOTHLY! And a system that allows us to outperform competition by 200%. (You can build this system, too. More on this in a second.)

Here’s what we were able to do since then:

  • Gained 6M+ followers across all platforms šŸ“ˆ
  • Add 1500+ new apartments to the portfolio šŸ¤‘
  • Grow to $300M in real estate šŸš€
  • 105% investor returns šŸŽ‰
  • 700K+ community members šŸ¤

And here’s the best part…

Having team members in all the main time zones gives us a 24-hour work cycle vs. 9-5/eight-hour on-the-clock performance.

This means we get 3x the productivity of a similar company. šŸ”„

Let me repeat that…3x PRODUCTIVITY vs. our competitors.

Meanwhile our project management software grants us 24-hour TEAM-WIDE connectivity that tracks all tasks and lets us know if productivity dips even a little bit.

There is ALWAYS someone senior awake. It could be Martin in Barcelona…Nat in New York…Vineet & Arif in New Delhi.

All the while giving YOU GUYS wealth hacks and daily content. šŸ”„

OK, so how can you do it?!

Well, the first step is to have an actual side hustle you’re launching. Not just an idea, a validated business.

MAJOR KEY: Do NOT spend money until you’ve made your FIRST DOLLAR! šŸ—šŸ—šŸ—šŸ—

(You can catch a replay Business Launch masterclass here and see TRIBE member Nessa launched her business on the spot and got her first $45K client shortly after.)

One of the easiest ways to start is with Airbnb—you can start that in 10 minutes. Literally. (Here’s a guide if you need it.)

Once you have your business, you build a virtual infrastructure (you really just need two softwares, which are FREE), manage the team accordingly and run the business from there.

I’m gonna put together a step-by-step video breakdown this weekend inside the new TRIBE U on the FIVE key things you need to do this for YOURSELF. šŸ’µ šŸ’Ž

From what software to use, how to build a team, how to keep.

In the meantime, drop a comment if you’re ready to build some wealth and any questions if you want more…

Let’s get to work. šŸ™Œ

PS: If you can’t be bothered with video and just wanna get to work, we’re hosting a TRIBE U workshop that will help you get this process started on the spot. It’s $479 $49. šŸ”„

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Money

CHART: How Blockchain Powers Bitcoin

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Blockchain, Bitcoin. Bitcoin, blockchain.

The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.

But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.

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