Benchmark Co. analyst Mike Hickey has maintained their neutral stance on 0NVL stock, giving a Hold rating today.
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Mike Hickey has given his Hold rating due to a combination of factors impacting Ubisoft Entertainment’s financial outlook. The company reported strong Q2 net bookings, surpassing guidance and showing significant year-over-year growth. However, despite returning to positive non-IFRS operating income, Ubisoft still faced a net loss and consumed a substantial amount of free cash flow, resulting in significant net debt. The upcoming Tencent transaction is expected to alleviate some of this financial pressure, but there are ongoing concerns regarding governance, forecasting, and execution risks.
Another critical factor influencing the Hold rating is the ongoing challenges with Ubisoft’s key live-service franchise, Tom Clancy’s Rainbow Six Siege. Although there was a temporary improvement in player metrics, the transition to free access led to increased cheating, affecting player spending and engagement. This situation highlights deeper structural issues with monetization and the franchise’s ability to sustain its economic model. As a result, any prolonged weakness in Siege could significantly impact Ubisoft’s live-service profile and medium-term earnings visibility. These factors, combined with cautious guidance for the upcoming fiscal quarters, contribute to the Hold rating.
According to TipRanks, Hickey is a 3-star analyst with an average return of 0.9% and a 53.44% success rate. Hickey covers the Communication Services sector, focusing on stocks such as Genius Sports Limited, Electronic Arts, and IMAX.
In another report released today, UBS also maintained a Hold rating on the stock with a €7.00 price target.