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Why Is Take-Two (TTWO) Down 9.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Take-Two Interactive (TTWO - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Take-Two due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Take Two’s Q3 Earnings Beats Estimates, Revenues Up Y/Y
Take Two Interactive Software reported third-quarter fiscal 2022 earnings of $1.24 per share, down 21% year over year.
Net revenues increased 4.9% year over year to $903.3 million. Net Bookings increased 6.4% to $866.1 million.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.13 per share and $884 million, respectively.
NBA 2K22 and NBA 2K21; Grand Theft Auto Online and Grand Theft Auto V; Grand Theft Auto: The Trilogy - The Definitive Edition, Red Dead Redemption 2 and Red Dead Online; Grand Theft Auto: San Andreas, Borderlands 3; and Two Dots were the biggest contributors to the company’s third-quarter fiscal 2022 top line.
Digital revenues (88.1% of revenues) improved 7.1% year over year to $759.7 million. Physical retail and other segment revenues (11.9% of revenues) declined 8.7% year over year to $107.5 million.
Recurrent consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content incorporated in special editions of certain games) was relatively flat and accounted for 61% of total revenues.
Top-Line Details
Region-wise, revenues from the United States (59.2% of revenues) increased 1.2% year over year to $534.9 million. International revenues (40.8% of revenues) increased 10.8% year over year to $368.4 million.
On the basis of platforms, revenues from console (73.7% of revenues) increased 1.4% year over year to $665.5 million. Revenues from PC and other (14.8% of revenues) decreased 1.2% year over year to $133.9 million. Revenues from mobile (11.5% of revenues) surged 49.9% year over year to $103.8 million.
Operating Details
Take Two’s gross profit increased 7.4% year over year to $552.9 million. Reported gross margin of 61.2% expanded 140 basis points on a year-over-year basis.
Operating expenses increased 17.8% year over year to $398.8 million.
Operating income came in at $154.1 million, plunging 12.5% year over year. Operating margin was 17.1% compared with the year-ago quarter’s 20.5%.
Balance Sheet
As of Dec 31, 2021, Take Two had $2.73 billion in cash, cash equivalents and short-term investments compared with $3.05 billion as of Sep 30, 2021.
Guidance
For the fourth quarter of fiscal 2022, Take Two expects GAAP net revenues between $835 million and $885 million. The company expects earnings between 46 and 56 cents per share.
Net bookings are projected between $808 million and $858 million.
For fiscal 2022, net bookings are expected between $3.37 billion and $3.42 billion. GAAP net revenues are likely to be $3.41-$3.46 billion. Take Two expects earnings between $3.10 per share and $3.20 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Take-Two has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Take-Two has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Take-Two (TTWO) Down 9.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Take-Two Interactive (TTWO - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Take-Two due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Take Two’s Q3 Earnings Beats Estimates, Revenues Up Y/Y
Take Two Interactive Software reported third-quarter fiscal 2022 earnings of $1.24 per share, down 21% year over year.
Net revenues increased 4.9% year over year to $903.3 million. Net Bookings increased 6.4% to $866.1 million.
The Zacks Consensus Estimate for earnings and revenues was pegged at $1.13 per share and $884 million, respectively.
NBA 2K22 and NBA 2K21; Grand Theft Auto Online and Grand Theft Auto V; Grand Theft Auto: The Trilogy - The Definitive Edition, Red Dead Redemption 2 and Red Dead Online; Grand Theft Auto: San Andreas, Borderlands 3; and Two Dots were the biggest contributors to the company’s third-quarter fiscal 2022 top line.
Digital revenues (88.1% of revenues) improved 7.1% year over year to $759.7 million. Physical retail and other segment revenues (11.9% of revenues) declined 8.7% year over year to $107.5 million.
Recurrent consumer spending (virtual currency, add-on content and in-game purchases, including the allocated value of virtual currency and add-on content incorporated in special editions of certain games) was relatively flat and accounted for 61% of total revenues.
Top-Line Details
Region-wise, revenues from the United States (59.2% of revenues) increased 1.2% year over year to $534.9 million. International revenues (40.8% of revenues) increased 10.8% year over year to $368.4 million.
On the basis of platforms, revenues from console (73.7% of revenues) increased 1.4% year over year to $665.5 million. Revenues from PC and other (14.8% of revenues) decreased 1.2% year over year to $133.9 million. Revenues from mobile (11.5% of revenues) surged 49.9% year over year to $103.8 million.
Operating Details
Take Two’s gross profit increased 7.4% year over year to $552.9 million. Reported gross margin of 61.2% expanded 140 basis points on a year-over-year basis.
Operating expenses increased 17.8% year over year to $398.8 million.
Operating income came in at $154.1 million, plunging 12.5% year over year. Operating margin was 17.1% compared with the year-ago quarter’s 20.5%.
Balance Sheet
As of Dec 31, 2021, Take Two had $2.73 billion in cash, cash equivalents and short-term investments compared with $3.05 billion as of Sep 30, 2021.
Guidance
For the fourth quarter of fiscal 2022, Take Two expects GAAP net revenues between $835 million and $885 million. The company expects earnings between 46 and 56 cents per share.
Net bookings are projected between $808 million and $858 million.
For fiscal 2022, net bookings are expected between $3.37 billion and $3.42 billion. GAAP net revenues are likely to be $3.41-$3.46 billion. Take Two expects earnings between $3.10 per share and $3.20 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Take-Two has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Take-Two has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.