Take-Two Interactive (TTWO) Q4 revenue and earnings beat estimates

Take-Two Interactive (TTWO) reported quarterly earnings of $0.85 per share, beating the Zacks Consensus Estimate of $0.68 per share. That compares with earnings of $1.16 per share a year ago. The figure is adjusted for one-time items.

This quarterly report represents an earnings surprise of 25%. A quarter ago, the publisher of “Grand Theft Auto” and other video games was expected to post earnings of $0.88 per share when it actually produced earnings of $0.93, representing a surprise of 5.68%.

The company has topped consensus earnings per share estimates twice over the last four quarters.

Take-Two, which belongs to the Zacks Toys – Games – Hobbies industry, posted revenues of $1.39 billion for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 4%. This compares with the prior-year revenues of $845.78 million. The company has surpassed the consensus revenue estimate only once over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Take-Two shares are up about 19.1% year to date, while the S&P 500 has gained 7%.

What’s next for Take-Two?

Even though Take-Two has outperformed the market this year, investors are wondering: what’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revisions trend for Take-Two is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is $0.68 on $1.27 billion in revenue for the coming quarter and $4.89 on $5.95 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Toys – Games – Hobbies currently ranks in the bottom 18% of the 250+ Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company from the broader Zacks Consumer Staples sector, Monro Muffler Brake (MNRO) is yet to release its earnings for the quarter ended March 2023. The earnings are expected to be released on May 18.

The auto repair chain is expected to report quarterly earnings of $0.33 per share in its upcoming report, which would represent a year-over-year change of +65%. The consensus earnings per share estimate for the quarter remained unchanged over the past 30 days.

Monro Muffler Brake revenue is expected to be $323.56 million, down 1.4% from the prior-year quarter.

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