Back to top

Image: Bigstock

Take Two (TTWO) to Report Q4 Earnings: What's in the Cards?

Read MoreHide Full Article

Take Two Interactive (TTWO - Free Report) is set to report fourth-quarter fiscal 2022 results on May 16.

For fourth-quarter fiscal 2022, Take Two expects GAAP net revenues between $835 million and $885 million. The company projects earnings between 46 and 56 cents per share.

Net bookings are projected between $808 million and $858 million.

For the quarter, the Zacks Consensus Estimate for earnings has remained steady at 98 cents per share in the past 30 days. The figure suggests a 31.9% decline from the year-ago quarter’s reported figure.

The consensus mark for revenues, pegged at $869.3 million, suggests 10.8% growth from the year-ago reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average earnings surprise being 43.2%.

Let’s see how things have shaped up for this announcement.

Factors to Consider

In fourth-quarter fiscal 2022, Take Two is expected to have benefited from the popularity of its franchises —Borderlands, Grand Theft Auto (GTA), Red Dead Redemption and NBA.

Major game releases in the fiscal fourth quarter are expected to have aided active user growth. This is anticipated to have been the largest contributor to net bookings in the to-be-reported quarter.

On Feb 8, Take-Two’s Private Division and Roll7 announced the digital availability of OlliOlli World for Nintendo Switch, PS 5 and PS 4, the Xbox Series X|S and Xbox One consoles, and PC via Steam.

Moreover, in the fiscal fourth quarter, the company released the newest installment of its flagship WWE video game franchise, WWE 2K22, developed by Visual Concepts.

Besides, Take-Two’s publishing label Rockstar Games announced the digital availability of Grand Theft Auto V and GTA Online for PS 5 and the Xbox Series S|X games and entertainment system.

Moreover, in the fiscal fourth quarter, Take-Two’s 2K and Supermassive Games launched The Quarry, an all-new teen-horror narrative game where a gamer’s every choice, big or small, shapes the story and determines who lives to tell the tale.

The company also announced the availability of an all-new, fantasy-fueled looter shooter game from the unpredictable mind of Tiny Tina called Tiny Tina’s Wonderland.

The company is also expected to have benefited from growth in 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).

However, stiff competition from the likes of Activision Blizzard and Electronic Arts is expected to have hurt Take Two’s market share in the to-be-reported quarter.

Key Developments in Q4

On Jan 10, Take-Two announced that it has entered into a definitive agreement with Zynga, under which Take-Two will be acquiring all outstanding shares of Zynga. The acquisition, as announced, is a cash-and-stock deal, implying an enterprise of $12.7 billion.

The Zynga acquisition, once completed, will establish Take-Two Interactive as one of the largest publishers of mobile games in the lucrative and fast-growing industry of interactive entertainment. The deal would unify Take Two’s top-class portfolio of PC and console games and Zynga’s leading mobile franchises.

The strategic acquisition is anticipated to close during first-quarter fiscal 2023, ending on Jun 30, 2022.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Take Two has an Earnings ESP of -11.08% and carries a Zacks Rank #4 (Sell) currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Cisco Systems (CSCO - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #2. The company is set to announce third-quarter fiscal 2022 results on May 18. You can see the complete list of today’s Zacks #1 Rank stocks here.

CSCO is down 22.7% in the year-to-date period compared with the Zacks Computer - Networking industry’s decline of 23.1%.

Analog Devices (ADI - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #2.  It is set to report its second-quarter fiscal 2022 results on May 18.

ADI is down 13.4% in the year-to-date period compared with the Zacks Semiconductor - Analog and Mixed industry’s decline of 21.8%.

Advance Auto Parts (AAP - Free Report) has an Earnings ESP of +4.89% and a Zacks Rank #3. The company is scheduled to announce its first-quarter 2022 results on May 23.

Advance Auto Parts is up 29.4% in the year-to-date period against the Zacks Automotive - Retail and Wholesale - Parts industry’s decline of 24.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in