Take-Two Interactive drops on disappointing guidance

Take-Two Interactive Software (TTWO.US), US video game company, reported results for fiscal-Q3 2022 yesterday after the close of the Wall Street session (calendar Q4 2021). Stock dropped almost 5% in the after-hours trading as results for the final quarter of calendar 2021 disappointed. While earnings and booking turned out to be slightly higher than expected, the company reported a miss in revenue. On top of that, guidance for fiscal-Q4 2022 and full fiscal-2022 was also weaker than expected by the market.

Fiscal-Q3 2022 results

• Adjusted revenue: $866.1 million vs $870.5 million expected

• Adjusted EPS: $1.32 vs $1.12 expected

• Digital Online bookings: $762.3 million vs $745.2 million expected

• Physical Retail and Other booking: $103.8 million vs $120.4 million expected

• Share of Digital Online bookings: 88% vs 85.3% expected

Fiscal-Q4 2022 guidance

• Adjusted revenue: $808-858 million vs $918.7 million expected

• Adjusted EPS: $0.78-0.88 vs $1.15 expected

Forecast for full fiscal-2022 (Q2 2021 - Q1 2022)

• Adjusted revenue: $3.37-3.42 billion vs $3.48 billion expected

• Adjusted EPS: $4.75-4.85 vs $4.77 expected

Disappointing forecasts for fiscal-Q4 and full fiscal-2022 pressured Take Two's share price in an after-hours trading yesterday. Stock was trading 5% lower at one point. However, bulls started to erase losses in today's pre-market session and now the stock is expected to open near 200-session moving average (purple line) in the $171.10 area, around 2.5% below yesterday's cash close. Taking a look at TTWO.US chart at D1 interval, we can see that the stock has rallied over 25% over the past month amid improved sentiment towards the gaming sector on M&A news. The nearest support level to watch should the stock deepen decline during the Wall Street session today can be found in the $163.50 area. Key near-term resistance zone ranges below the $180.00 handle.

Source: xStation5