Shares of Take-Two Interactive (NASDAQ: TTWO) were down 2.9% as of 10:55 a.m. ET on Wednesday. Investors have concerns about the near-term trends in gaming following a disappointing earnings report from Electronic Arts on Tuesday. Electronic Arts missed earnings and revenue estimates for the recent quarter, in which management blamed lower engagement for some of its games that is not consistent with historical trends this time of year.
Take-Two (TTWO) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
After enjoying surging valuations thanks to pandemic-driven tailwinds and the broader run-up for growth stocks, video game stocks have cooled off a lot. Positive engagement tailwinds receded as many parts of the world moved closer toward business as usual, and the rising interest rate environment has applied pressure to the stock market at large. Currently trading down 48% from its peak, Take-Two Interactive (NASDAQ: TTWO) stock in particular looks like a smart buy right now.