Back to top

Image: Bigstock

Take-Two Interactive (TTWO) Laps the Stock Market: Here's Why

Read MoreHide Full Article

In the latest market close, Take-Two Interactive (TTWO - Free Report) reached $152, with a +0.17% movement compared to the previous day. The stock exceeded the S&P 500, which registered a gain of 0.1% for the day. Meanwhile, the Dow lost 0.08%, and the Nasdaq, a tech-heavy index, added 0.28%.

The the stock of publisher of "Grand Theft Auto" and other video games has fallen by 7.91% in the past month, lagging the Consumer Discretionary sector's loss of 0.3% and the S&P 500's gain of 4.08%.

The investment community will be closely monitoring the performance of Take-Two Interactive in its forthcoming earnings report. The company is forecasted to report an EPS of $0.01, showcasing a 97.22% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $1.24 billion, reflecting a 2.79% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.52 per share and revenue of $5.64 billion, which would represent changes of +0.4% and +4.79%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Take-Two Interactive. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.9% higher within the past month. Currently, Take-Two Interactive is carrying a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Take-Two Interactive is currently trading at a Forward P/E ratio of 60.12. This signifies a premium in comparison to the average Forward P/E of 16.77 for its industry.

Meanwhile, TTWO's PEG ratio is currently 1.85. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Toys - Games - Hobbies industry was having an average PEG ratio of 1.35.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 240, which puts it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Take-Two Interactive Software, Inc. (TTWO) - free report >>

Published in