Despite unprecedented rentability, Ubisoft stock dropped by 12% and more

[fireflame]

I am not a specialist of the stock market, so I can't explain while it makes sense.The operational result of Ubisoft increased by 46%, reaching 448 millions. Yet, on May 16th, the stock lost 12% because of the disappointing net booking. The net booking increased by 17 % and reached 2;23 billions, but investors expected 2,05.
The short terms expectatioàns for Ubisoft are also not great apparently

https://www.businessinsider.fr/ubisoft-seffondre-en-bourse-malgre-une-rentabilite-record/

I believe and hope the stock will rise again but I am not sure. Ubisoft stock value greatly varies depending on times and games release I noticed.

 

[lt519]

It needs to be said over and over here. Stocks are priced on growth potential. Ubisoft has a price to earnings ratio of 80. They are priced for massive growth. Anytime they don't show growth as expected the stock price will drop and anytime the company adjust projections for future quarters lower then the stock will drop.

You can have a fantastic year, but if your P/E is 80, your price is based on your future not your past. A P/E ratio of 80 is around what Amazon has because they are in the explosive growth stage versus Target at 13 because it has already passed that phase.

For example Nintendo's PE is 30, EA's is 27, and TTWO is 35. Those are far more reasonable. Ubisoft was priced to explode and it did not.