It’s been a brutal few months for Activision Blizzard Inc. stock. Shares have fallen 51% since in October 2018, with little sign of easing up.

Tonight, Activision reports its fourth-quarter earnings after the US market closes. It’s a make-or-break moment for traders who hope to see Activision come back fighting.

Expectations aren’t exactly high. Activision posted lackluster forecasts in the previous quarter and disappointed gamers with underwhelming releases. Not to mention strong competition from gaming juggernaut Fortnite and the threat of mass redundancies. The stock fell 7% alone yesterday as traders flee the gaming giant.

If tonight’s results fall below analyst forecasts, the stock could see another painful selloff.

“It’s awful, you gotta stay away from this stock”

Traders remain split on the stock. One analyst at Oppenheimer is particularly bearish on Activision’s prospects going into the earnings call. Ari Wald told CNBC, “you gotta stay away from this stock.”

Wald claims the gaming industry is in a bearish trend and the technical analysis confirms a negative picture. Activision stock, he said, failed to break its 50-day moving average and fell through a number of other technical indicators.

During the same interview, however, Michael Bapis of Vios Advisors at Rockefeller Capital struck a more positive tone:

“We’re going the other way on Activision. We think it’s a classic restructuring of a rapidly growing company in a growth space. 12-18 months we’re long this space. We’re long on Activision.”

At a 51% discount, Bapis sees Activision shares trading at a bargain price.

A Painful Three Months for Activision

It’s easy to see why traders are running scared. The company warned of poor forecasts for 2019 and admitted its user numbers had fallen. It’s a not-so-subtle admission that Fortnite, with its 125 million players, had stolen some of Activision’s market share.

Activision also cut ties with Bungie, the developers behind the original gaming IP Destiny, in a move that further slashed the stock price.

As for the impending layoffs, there’s still no clarity on how many jobs are on the line. This is yet another issue that hangs in the balance as we go into the earnings report.

People close to Activision and Blizzard who I've talked to today say they still haven't been told anything. Those in departments likely to be cut say they still don't know if they'll have jobs tomorrow. Horrifying, cruel treatment. My heart goes out to everyone there. — Jason Schreier (@jasonschreier) February 11, 2019

The company also made an error in judgment when it unveiled the Diablo Immortal mobile game in November. It was received with boos by attendees at BlizzCon and led to accusations that the company was no longer in tune with what gamers wanted.

An anonymous employee appeared to confirm this in an interview with Kotaku:

“A lot of decisions now are being driven by business folks, marketing and finance folks. There’s a real struggle now between developers and the business people… Strategic decisions are being driven by the finance group.”

Activision needs to come back strong with a hit game and rebuild trust with the community.

Let’s Talk Mumbers…

There’s a lot hanging on tonight’s report, but what exactly should you look out for?

Analysts are expecting earnings of $1.29 per share on revenue of $3.04 billion. Anything lower and the stock could move south. Of course, if Activision beats expectations, we’re likely to see a strong rebound.

Traders will also be looking for better long-term forecasts from Activision HQ. According to a poll conducted by Bloomberg, analysts expect a decline of 3% earnings in 2019, compared to 2018’s 13% growth.

Activision doesn’t need to blow the doors off today. It just needs modest results and a solid plan for the future. Something to reignite the gaming community and spur new sales.

Activision Blizzard Inc. reports tonight after the US market closes. Meanwhile, rival Electronic Arts stock is soaring after its new game Apex Legends crossed the 25 million user mark. Game on, Activision.