What to Expect from Take-Two's (TTWO) Q3 Earnings Report?
Take-Two Interactive Software Inc. TTWO is set to report third-quarter fiscal 2016 results on Feb 3. Last quarter, the company delivered a positive earnings surprise of 533.33%. The company delivered positive earnings surprises in three out of the last four quarters, translating to an average positive earnings surprise of 199.30%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Analyst observe that the company will continue to benefit from its popular offerings like GrandTheft Auto V and Grand Theft Auto online, Borderlands, along with other releases like WWE 2K16 and NBA 2K16.In fact, higher sale of digital version of the games is adding to the company’s margins. The company continues to expect growth in digital revenues driven by higher sale of full game downloads and increases in recurrent consumer spending.
However, increasing competition from the likes of Electronic Arts EA, Activision ATVI and Zynga remains a headwind.
Earnings Whispers
Our proven model does not conclusively show that Take-Two is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 40 cents. Hence, the difference is 0.00%.
Zacks Rank: Take-Two’s Zacks Rank #1 (Strong Buy) increases the predictive power of ESP. However we need to have a positive ESP to be confident of an earnings beat.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
A Stock to Consider
Here is a company, which you may consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter:
MaxLinear, Inc. MXL, with an Earnings ESP of +2.94% and a Zacks Rank #1.
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TAKE-TWO INTER (TTWO): Free Stock Analysis Report
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