Take-Two (TTWO) to Report Q3 Earnings: What's in Store?
Take-Two Interactive TTWO is set to report third-quarter fiscal 2024 results on Feb 8.
For the third quarter of fiscal 2024, Take-Two expects GAAP net revenues between $1.29 billion and $1.34 billion. The company expects a loss per share between 73 cents and 63 cents.
For the quarter, the Zacks Consensus Estimate for revenues is currently pegged at $1.34 billion, suggesting a decline of 3.23% from the figure reported in the year-ago quarter.
The consensus mark for fiscal third-quarter earnings has dropped 1.4% to 72 cents per share in the past 30 days, indicating a decline of 22.58% from the year-ago quarter’s reported figure.
Take-Two’s earnings beat the Zacks Consensus Estimate thrice in the last four quarters and missed once. TTWO delivered a trailing four-quarter earnings surprise of 12.14%, on average.
Let’s see how things have shaped up for this announcement:
Take-Two Interactive Software, Inc. Price and EPS Surprise
Take-Two Interactive Software, Inc. price-eps-surprise | Take-Two Interactive Software, Inc. Quote
Factors to Consider
Take-Two’s fiscal third-quarter performance is expected to have benefited from steady demand for its popular franchises, including Grand Theft Auto, Red Dead Redemption, NBA 2K and WWE 2K.
The growing popularity of NBA 2K24, launched in the last quarter, is expected to have aided user growth in the to-be-reported quarter. The company launched its new imaginative third-person shooter-skater game, Rollerdrome, in the to-be-reported quarter.
Moreover, the acquisition of Zynga has been highly accretive to Take-Two’s prospects as it has expanded its mobile gaming portfolio.
The launch of Top Troops, a game that blends mobile strategy, RPG and merge mechanics by Zynga, is expected to have aided mobile revenues in the to-be-reported quarter.
However, dullness in recurrent consumer spending growth, which is generated from ongoing consumer engagement and includes virtual currency, add-on content, in-game purchases and advertising, is expected to have reflected in the company’s top-line growth.
In second-quarter fiscal 2024, recurrent consumer spending decreased 9% year over year and accounted for 77% of total net revenues.
The company has been witnessing increased operating expenses for game development and marketing. The rising expenses are expected to have kept margins under pressure in the to-be-reported quarter.
Sluggishness in video game spending in the quarter is expected to have reflected in TTWO’s top-line growth. Per VentureBeat, which cited NPD data, consumer spending on video games declined 5% in October and 7% in November. For the month of December, video game sales remained mostly even, with a slight 4% increase in total sales.
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. That is not the case here.
Take-Two has an Earnings ESP of -3.86% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering from the same space, as our model shows that these have the right combination of elements to beat on earnings in their soon-to-be-reported quarterly results.
BlackLine BL has an Earnings ESP of +2.62% and sports a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
BlackLine is scheduled to release fourth-quarter 2023 results on Feb 13. The Zacks Consensus Estimate for BL’s earnings is pegged at 55 cents per share, suggesting a jump of 57.1% from the prior-year quarter.
Twilio TWLO has an Earnings ESP of +31.37% and a Zacks Rank #2 at present.
Twilo is set to announce fourth-quarter 2023 results on Feb 14. The Zacks Consensus Estimate for TWLO’s earnings is pinned at 57 cents per share, indicating growth from the year-ago quarter’s figure of 22 cents per share.
Bill Holdings BILL has an Earnings ESP of +6.17% and a Zacks Rank #3 at present.
Bill Holdings is slated to announce second-quarter fiscal 2024 results on Feb 8. The Zacks Consensus Estimate for BILL’s earnings is pinned at 41 cents per share, suggesting a decline of 2.4% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report
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