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Take-Two Interactive (TTWO) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Adobe (ADBE) delivered earnings and revenue surprises of 2.81% and 1.64%, respectively, for the quarter ended May 2019. Do the numbers hold clues to what lies ahead for the stock?

Take-Two Interactive (TTWO) closed the most recent trading day at $94.53, moving +0.89% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.46%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.59%.

Prior to today's trading, shares of the publisher of "Grand Theft Auto" and other video games had gained 5.98% over the past month. This has outpaced the Consumer Discretionary sector's gain of 1.83% and the S&P 500's gain of 3.24% in that time.

Wall Street will be looking for positivity from TTWO as it approaches its next earnings report date. The company is expected to report EPS of $0.78, up 13.04% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $508.22 million, up 23.54% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for TTWO. These revisions help to show the ever-changing nature of near-term business trends. 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 benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TTWO is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, TTWO is holding a Forward P/E ratio of 19.07. This represents a discount compared to its industry's average Forward P/E of 21.72.

Meanwhile, TTWO's PEG ratio is currently 1.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Toys - Games - Hobbies industry currently had an average PEG ratio of 1.87 as of yesterday's close.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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