Video Game Stock Glitches on Dismal Revenue, Forecast

Year-over-year, TTWO is down 19%

Digital Content Manager
Feb 8, 2022 at 10:11 AM
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Take-Two Interactive Software, Inc. (NASDAQ:TTWO) stepped into the confessional last night to report a fiscal third-quarter earnings beat. However, the company's revenue missed analysts' expectations, leading the video game name to adjust its fourth-quarter sales forecast below market estimates. This could be a sign that the pandemic-fueled gaming boom is losing steam. At last check, the security is down 1.2% at $173.01. 

The brokerage bunch has yet to chime in on the results, but there is plenty of room for bear notes. Of the 16 analysts in coverage, 14 call TTWO a "buy" or better, while the 12-month consensus target price of $208.57 is a significant 20.9% premium to the equity's current perch.

Digging deeper, Take-Two Interactive stock had been chopping higher since hitting a Jan. 10, two-year low of $138.19. A ceiling at the $177 level rejected the equity's pre-earnings rally, however, though the shares are still pacing for their third-straight close above the 80-day moving average. Longer term, TTWO is down 19% year-over-year.

The options pits lean firmly bullish. The stock sports a 50-day call/put volume ratio of 2.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 82% of readings from the past year. This means long calls have been getting picked up at a much quicker-than-usual clip. 

Drilling down to today's options activity, 5,889 calls and 5,924 puts have crossed the tape, which is six times the intraday average. Most popular is the 2/11 180-strike call, followed closely by the February 160 put, with positions being opened at the former.


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