Market Overview

UPDATE: Sterne Agee Initiates Coverage on King Digital

Share:
Related
Stifel Remains A Buyer Of Activision Blizzard Into Q4 Earnings Print
Credit Suisse Maintains Outperform Ratings On Activision Blizzard, EA Following Holiday Season
How Much Further To Fall Before The Market Is Cheap? (Seeking Alpha)

Sterne Agee initiated coverage on King Digital Entertainment (NYSE: KING) with a Neutral rating following Wednesday's 15 percent drop on the first day of trading. Shares are down another 2.6 percent in Thursday's trading.

Analyst Arvind Bhatia sees two critical factors near-term for the company:

  • The decay rate of Candy Crush.
  • Growth in Farm Heroes Saga

The analyst noted the Candy Crush Saga represents 78 percent of fourth quarter bookings, and is “already tracking 20% below peak-booking levels reached in July 2013.”

King Digital has 180 games, but revenue is “concentrated among 3 games, with represent 95% of bookings in 4Q'13,” said Bhatia.

Bhatia is projecting “y/y bookings growth of 32% and 4% in 2014/2015, respectively and adjusted EBITDA growth of 24% and 2% in 2014/2015 respectively.”

Posted-In: Arvind Bhatia Sterne AgeeAnalyst Color Initiation Analyst Ratings

 

Related Articles (KING)

Get Benzinga's Newsletters