It is Poised to be a Bull Market for Take-Two Interactive Software Inc. (TTWO)

Take-Two Interactive Software Inc. (NASDAQ: TTWO) stock fell -3.10% on Friday to $117.92 against a previous-day closing price of $121.69. With 1.44 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.96 million shares. During the session, the Electronic Gaming & Multimedia company that operates in wider Communication Services sector, reached to the highest price of $122.46 whereas the lowest price it dropped to was $117.92. The 52-week range on TTWO shows that it touched its highest point at $195.82 and its lowest point at $101.85 during that stretch. It currently has a 1-year price target of $161.67. Beta for the stock currently stands at 0.76.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TTWO was down-trending over the past week, with a drop of -7.99%, but this was down by -5.90% over a month. Three-month performance dropped to -8.30% while six-month performance fell -22.57%. The stock lost -19.08% in the past year, while it has lost -33.65% so far this year. A look at the trailing 12-month EPS for TTWO yields 1.52 with Next year EPS estimates of 7.56. For the next quarter, that number is 1.38. This implies an EPS growth rate of -29.60% for this year and 53.04% for next year. EPS is expected to grow by 29.86% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 38.00%.

Float and Shares Shorts:

At present, 166.69 million TTWO shares are outstanding with a float of 163.52 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.0 million, which was 3.08% higher than short shares on Jun 14, 2022. In addition to Mr. Strauss H. Zelnick Esq. as the firm’s Exec. Chairman & CEO, Mr. Karl Slatoff serves as its Pres.

Institutional Ownership:

Through their ownership of 72.75% of TTWO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 49.30% of TTWO, in contrast to 33.62% held by mutual funds. Shares owned by individuals account for 18.48%. As the largest shareholder in TTWO with 10.15% of the stake, The Vanguard Group, Inc. holds 16,923,833 shares worth 16,923,833. A second-largest stockholder of TTWO, BlackRock Fund Advisors, holds 9,248,936 shares, controlling over 5.55% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in TTWO, holding 6,753,431 shares or 4.05% stake. With a 2.88% stake in TTWO, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 4,796,204 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 2.23% of TTWO stock, is the second-largest Mutual Fund holder. It holds 3,718,929 shares valued at 455.79 million. Vanguard 500 Index Fund holds 2.12% of the stake in TTWO, owning 3,527,576 shares worth 432.34 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, TTWO reported revenue of $1.10B and operating income of -$37.40M. Over the past year, revenue came in at $3.79B while operating income stood at $265.69M. It generated -$104.00M net income for the quarter, which came to $161.72M over the last twelve months. The EBITDA in the recently reported quarter was $184.80M and diluted EPS was -$0.76. EBITDA for the full year was $735.46M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TTWO since 27 analysts follow the stock currently. There are 15 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TTWO analysts setting a high price target of $200.00 and a low target of $126.00, the average target price over the next 12 months is $164.04. Based on these targets, TTWO could surge 69.61% to reach the target high and rise by 6.85% to reach the target low. Reaching the average price target will result in a growth of 39.11% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TTWO will report FY 2023 earnings on 05/15/2023. Analysts have provided yearly estimates in a range of $6.03 being high and $4.51 being low. For TTWO, this leads to a yearly average estimate of $4.88. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Take-Two Interactive Software Inc. surprised analysts by -$0.15 when it reported $0.71 EPS against a consensus estimate of $0.87. The surprise factor in the prior quarter was $0.08. Based on analyst estimates, the high estimate for the next quarter is $1.77 and the low estimate is $1.25. The average estimate for the next quarter is thus $1.38.

Summary of Insider Activity:

Insiders traded TTWO stock several times over the past three months with 9 Buys and 1 Sells. In these transactions, 4,727 shares were bought while 167 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 2,010,662 while 645,082 shares were sold.

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