Ubisoft (FR:UBI) stock fell hard on Thursday after the video game company’s shares were hit with two downgrades. This came after it failed to impress investors in its latest earnings report. Adjusted earnings per share of 96 cents missed Wall Street’s estimate of €1.16.
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Ubisoft’s outlook also didn’t inspire confidence in shareholders. It expects Fiscal 2025-2026 net bookings to be stable year-on-year, breakeven non-IFRS operating income, and negative free cash flow. Beyond that, the company expects to return to positive non-IFRS operating income and free cash flow generation in Fiscal 2026-2027.
Ubisoft also failed to provide hard sales numbers for Assassin’s Creed Shadows. Even so, expert estimates suggest the game underperformed. It’s estimated to have sold 1.7 million units on Sony’s (SONY) PlayStation 5 and 367,800 copies on Steam. Sales estimates for Assassin’s Creed Shadows on Microsoft’s (MSFT) Xbox isn’t available, but it’s unlikely to have surpassed Steam sales. These estimates suggest sales fell well short of 3 million units.
Analysts Took Notice of Ubisoft’s Woes
UBI stock was hit with a downgrade from Bloomberg Ind. analysts, dropping it to a Sell rating from Neutral, while also cutting the firm’s price target to €9 from €12. Oddo BHF analyst Emmanuel Matot also dropped the shares to a Sell rating from Neutral, and provided a €9 price target, representing a potential 4.28% downside for Ubisoft shares.
UBI stock was hit hard by its earnings report and analyst downgrades, which caused a 19.06% drop on Thursday. This extends the video game developer’s 28.14% year-to-date decline.
Is UBI Stock a Buy, Hold, or Sell?
Turning to Wall Street, the analysts’ consensus rating for Ubisoft is Moderate Sell, based on eight Hold and three Sell ratings over the last three months. With that comes an average UBI stock price target of €11.49, representing a potential 21.51% upside. These ratings and price targets could change as more analyst updates follow the company’s earnings report.
