UBISOFT

Analysis of Ubisoft share price

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Elements that can influence the price of this asset:

Analysis N°1

First of all, remember that the financial results of this company are influenced by the delays in the launching of its video games, which are highly anticipated by the public. Such announcements could therefore have a negative impact on the price of its shares.

Analysis N°2

The closing of the company’s accounts takes place at the end of the month of March since the company makes most of its sales between September and January. You should therefore take into account this seasonality when taking a decision.

Analysis N°3

The universe of core gaming, especially on PlayStation and Xbox consoles, should be carefully followed since it is the major axis of development of Ubisoft.

Analysis N°4

The group put in place a plan to generate 2.2 billion euros of revenue by doubling the operating margin to more than 20% and a cash flow of more than 300 million euros in 2016 for a period of 3 years. The achievement or non-achievement of this objective will of course have a significant influence on this title on the stock market. The group has already achieved its objective for the period of 2016-2017 with a turnover of 1.7 billion euros and a current profit which reaches 230 million euros.

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General presentation of Ubisoft

Ubisoft is a company specialized in the development and edition of video games and software. It is currently one of the leaders in this market. Its activity divides therefore into several sectors which are mainly; the creation, development and production of video games, but also the operation of third party software licenses and the distribution of video games of third-party publishers.

The turnover of this company is mainly generated in North America, but it also comes from Europe from the United Kingdom, France and Germany.

The price of Ubisoft shares is currently listed on the compartment A of the Euronext Paris market in France. Ubisoft is also part of the composition of the French national stock index CAC All shares.

Analysis of Ubisoft share price
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The major competitors of Ubisoft

Ubisoft is one of the biggest companies in the world of video games and it gains a little more part in the market every day against its competition. But who are exactly its main competitors? This is what we are going to discover here with details about the major video games design companies and their classification according to their importance on the market.

Activision Blizzard

which is the leading publisher of online and video games consoles (World of Warcraft)

Electronic Arts

which happens to be number two among video games publishers in the field of sports and simulation (The Sims).

Other competitors

Ubisoft also has two other main competitors, they are the publishers and designers


The major partners of Ubisoft

Hasbro

In 2013, Ubisoft announced the signing of an agreement with the board game publisher, Hasbro. This allowed the French company to publish titles such as Risk, Monopoly or Trivial Pursuit for consoles.

Coca-Cola

 Coca-Cola then renovated a partnership with Ubisoft in 2014. Which had a worldwide success with Just Dance, a console game created in 2009 that sold more than 50 million units, including 3.6 million just in France

Sony

Ubisoft and Sony established a partnership for the Electronic Entertainment Expo (E3) with the game “Assassin’s Creed Syndicate” as a theme, aiming to offer original content on PlayStation 4. “Assassin’s Creed Syndicate’ for PS4 came out on October 23, 2015.

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The factors in favour of a rise in the Ubisoft share price:

One of the main advantages of Ubisoft is of course, its position in the world of video games, since it is the third largest independent publisher in the world. The success of this group is mostly due to some of its very popular licenses such as Assassin’s Creed, Just Dance, Watch Dogs, Far Cry or the saga of Tom Clancy with Splinter Cell, Ghost Recon, Rainbow6 and the Division. Ubisoft is particularly well positioned on the so called “open world” games category, which has been very successful for several years now and represent more than 60% of shares in the market of video games industry against only 16% in 2008 with among others the games Assassin’s Creed, Far Cry and Watch Dogs. Ubisoft is present and evidently well represented in all the different segments of the world of video games with consoles integrating the blockbusters of the group, the free to play on PC with the games Ghost Recon Online in particular, but also the games for mobile phones with the famous Rayman. Ubisoft also bought the mobile game publisher Ketchapp, who created the game 2048.

Ubisoft has also had an increase in shares on the market in the last years with not less than 33% on PlayStation and Xbox consoles. The group has also invested a lot in the digital domain, which currently generates the majority of the company’s turnover (75% of its turnover). The group’s shares on the market in the United States rose to 10%, which is twice of what they had in 2015 and it increase to 14.3% in the European market. The demand of video games in the United States has particularly benefited from the loss of value of the euro against the American dollar and now accounts for nearly 40% of the group’s total sales.

The factors in favour of a drop in the Ubisoft share price:

But of course, Ubisoft shares does not only have advantages its also has some disadvantages. We can mention in particular, that it remains difficult for investors to anticipate accurately the results of this company because of a dispersion of the market consensus in this sector of activity. Ubisoft also faces strong competition concerning high-end video games with an increase in its cost of production and significant pressure on the prices for casual games.

Moreover, it is regrettable that the group is not positioned correctly on the sector of massive multi-player online games like most of its major competitors.

Concerning the company’s recent results, they were rather disappointing concerning the sales of the blockbuster Assassins’s Creed in 2015. The group was expecting to make a reboot of this franchise in the near future and put this production on hold. The company’s free cash-flow was also degraded by the launching of the two AAA games in 2016, which caused concern among investors regarding the fast turnaround of its value.

In summary, even if Ubisoft presents real advantages for investors and seems confident about its future, you should carefully follow its news and results before making your mind about its growth prospects on the long-term.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What are the different stock market indices that Ubisoft is part of?

Ubisoft is currently listed on compartment A of the Euronext Paris market and is one of France's largest market capitalizations. It is therefore included in the benchmark CAC All Shares index but not in the CAC 40. However, it is also included in the composition of other stock market indices, including the CAC All Tradable, CAC Large 60, CAC Next 20, Euronext 100, PEA, SBF 120 and the Stoxx France 50.

What was the amount of the dividend paid by Ubisoft in 2020?

In 2020, the Ubisoft group did not pay a dividend to its shareholders. The return on this stock for this period is therefore also a negative return at -0.09. It should also be noted that the group currently holds €1,322 million in shareholders' equity. The absence of a dividend is due to the fact that the company recorded a deficit of 124 million euros for the year 2019.

Who owns the capital of the Ubisoft group?

In 2020, the Ubisoft group's shareholding structure will be split between different types of private shareholders, with the Guillemot Family still holding 17.79% of the company's shares, JP Morgan Chase & Co bank holding 11.09% of the shares, Crédit Agricole Corporate and Investment Bank with 9.49% of the shares, Tencent Holding with 5.01% of the shares, Baillie Gifford & Co with 5% of the shares, BlackRock with 4.92% and finally WCM Investment Management with 3.95% of the group's capital.

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