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

Zacks Equity Research

Take-Two Interactive (TTWO) closed at $96.83 in the latest trading session, marking a -0.33% move from the prior day. This change lagged the S&P 500's daily gain of 0.1%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, lost 0.66%.

Heading into today, shares of the publisher of "Grand Theft Auto" and other video games had gained 1.53% over the past month, lagging the Consumer Discretionary sector's gain of 7.57% and the S&P 500's gain of 3.95% in that time.

Investors will be hoping for strength from TTWO as it approaches its next earnings release, which is expected to be May 13, 2019. 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 $506.98 million, up 23.24% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for TTWO. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TTWO is currently a Zacks Rank #3 (Hold).

Digging into valuation, TTWO currently has a Forward P/E ratio of 19.73. Its industry sports an average Forward P/E of 21.47, so we one might conclude that TTWO is trading at a discount comparatively.

We can also see that TTWO currently has a PEG ratio of 1.13. 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 was holding an average PEG ratio of 2.11 at yesterday's closing price.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 15, putting it in the top 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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