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Take-Two (TTWO) Up 1.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Take-Two Interactive (TTWO - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Take-Two due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Take-Two Q1 Earnings Lag Estimates, Revenues Up Y/Y
Take-Two Interactive Software reported first-quarter fiscal 2024 adjusted earnings of 36 cents per share, which missed the Zacks Consensus Estimate by a penny. The company reported earnings of 61 cents per share in the year-ago quarter.
Net revenues jumped 16.5% year over year to $1.28 billion.
Game revenues (85.3% of revenues) improved 7.5% year over year to $1.1 billion. Advertising revenues (14.7% of revenues) surged 126.7% year over year to $188.6 million.
Quarter Details
Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and in-game advertising) surged 29% year over year and accounted for 83% of total net revenues.
Top-line growth benefited from strong adoption titles, including NBA 2K23, Grand Theft Auto Online and Grand Theft Auto V, hyper-casual mobile portfolio, Toon Blast, Empires & Puzzles, Merge Dragons!, Red Dead Redemption 2 and Red Dead Online, Words With Friends and Toy Blast.
Take-Two’s gross profit increased 1.9% year over year to $679.2 million. Reported gross margin was 52.9% compared with 60.5% reported in the year-ago quarter.
Operating expenses surged 25.5% year over year to $883.5 million.
Operating loss was $204.3 million against the year-ago quarter’s operating income of $128.9 million.
Balance Sheet
As of Jun 30, 2023, Take-Two had $1.27 billion in cash, cash equivalents and short-term investments compared with $1.01 billion as of Mar 31, 2023.
The company had a debt of $3.08 billion as of Jun 30, almost unchanged from Mar 31, 2023.
Guidance
For the second quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.26 billion and $1.31 billion. It expects a loss between $1 and 90 cents per share.
For fiscal 2024, the company expects GAAP net revenues between $5.37 billion and $5.47 billion. It expects a loss between $3.20 and $2.95 per share.
For fiscal 2024, net cash provided by operating activities is expected to be roughly $90 million. Capital expenditures are expected to be approximately $180 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Take-Two has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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 indicates a downward shift. Notably, Take-Two has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Take-Two belongs to the Zacks Toys - Games - Hobbies industry. Another stock from the same industry, Hasbro (HAS - Free Report) , has gained 10.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Hasbro reported revenues of $1.21 billion in the last reported quarter, representing a year-over-year change of -9.7%. EPS of $0.49 for the same period compares with $1.15 a year ago.
Hasbro is expected to post earnings of $1.82 per share for the current quarter, representing a year-over-year change of +28.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.2%.
Hasbro has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Take-Two (TTWO) Up 1.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Take-Two Interactive (TTWO - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Take-Two due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Take-Two Q1 Earnings Lag Estimates, Revenues Up Y/Y
Take-Two Interactive Software reported first-quarter fiscal 2024 adjusted earnings of 36 cents per share, which missed the Zacks Consensus Estimate by a penny. The company reported earnings of 61 cents per share in the year-ago quarter.
Net revenues jumped 16.5% year over year to $1.28 billion.
Game revenues (85.3% of revenues) improved 7.5% year over year to $1.1 billion. Advertising revenues (14.7% of revenues) surged 126.7% year over year to $188.6 million.
Quarter Details
Recurrent consumer spending (which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and in-game advertising) surged 29% year over year and accounted for 83% of total net revenues.
Top-line growth benefited from strong adoption titles, including NBA 2K23, Grand Theft Auto Online and Grand Theft Auto V, hyper-casual mobile portfolio, Toon Blast, Empires & Puzzles, Merge Dragons!, Red Dead Redemption 2 and Red Dead Online, Words With Friends and Toy Blast.
Take-Two’s gross profit increased 1.9% year over year to $679.2 million. Reported gross margin was 52.9% compared with 60.5% reported in the year-ago quarter.
Operating expenses surged 25.5% year over year to $883.5 million.
Operating loss was $204.3 million against the year-ago quarter’s operating income of $128.9 million.
Balance Sheet
As of Jun 30, 2023, Take-Two had $1.27 billion in cash, cash equivalents and short-term investments compared with $1.01 billion as of Mar 31, 2023.
The company had a debt of $3.08 billion as of Jun 30, almost unchanged from Mar 31, 2023.
Guidance
For the second quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.26 billion and $1.31 billion. It expects a loss between $1 and 90 cents per share.
For fiscal 2024, the company expects GAAP net revenues between $5.37 billion and $5.47 billion. It expects a loss between $3.20 and $2.95 per share.
For fiscal 2024, net cash provided by operating activities is expected to be roughly $90 million. Capital expenditures are expected to be approximately $180 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Take-Two has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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 indicates a downward shift. Notably, Take-Two has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Take-Two belongs to the Zacks Toys - Games - Hobbies industry. Another stock from the same industry, Hasbro (HAS - Free Report) , has gained 10.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Hasbro reported revenues of $1.21 billion in the last reported quarter, representing a year-over-year change of -9.7%. EPS of $0.49 for the same period compares with $1.15 a year ago.
Hasbro is expected to post earnings of $1.82 per share for the current quarter, representing a year-over-year change of +28.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.2%.
Hasbro has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.