What’s Happening With Take-Two Interactive Stock?

TTWO: Take-Two Interactive Software logo
TTWO
Take-Two Interactive Software

The price of Take-Two Interactive stock (NASDAQ: TTWO) has seen a fall of over 9% in a month, while it’s down 23% YTD. The company announced its plans to acquire the mobile gaming company – Zynga – in a deal valued at $12.7 billion in January this year. TTWO stock was weighed down, given that the deal reflected a 64% premium to the then market price of ZNGA stock. Take-Two Interactive recently raised $2.7 billion in debt capital to fund the Zynga acquisition. The company had a debt of a little over $200 million last quarter, while its cash in hand was nearly $2.5 billion. The debt levels will rise meaningfully post the Zynga acquisition.

Furthermore, there are some near-term headwinds, including a decline in gaming user engagement levels after the global economies have opened up and people are venturing out of their homes post-pandemic. Zynga itself has been facing pressure due to changes in Apple’s ad tracking policies. That said, we see the Zynga acquisition as a positive for Take-Two Interactive, given its superior gross margins and fast-growing mobile-gaming business.

Now that TTWO has seen a fall of 9% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise in TTWO stock over the next month. Of 250 instances in the last ten years that TTWO stock saw a twenty-one-day fall of 9% or more, 135 resulted in TTWO stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 135 out of 250, or about a 54% chance of a rise in TTWO stock over the coming month. See our analysis on Take-Two Interactive Stock Chance of Rise for more details.

Relevant Articles
  1. JetBlue Stock Looks Unlikely To Bounce Soon After 17% Fall Last Month
  2. Southwest Airlines Stock Has Lost More Than 50% Since 2017- Here’s Why
  3. What’s Next For Expedia’s Stock?
  4. This Aerospace Company Appears To Be A Better Pick Over Textron Stock
  5. Is Hartford Financial Stock Fairly Priced?
  6. Are Digital Ad Stocks Oversold?

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years’ data

  • After moving -0.7% or more over five days, the stock rose on 60% of the occasions in the next five days.
  • After moving -9.6% or more over ten days, the stock rose on 61% of the occasions in the next ten days.
  • After moving -9.2% or more over a twenty-one-day period, the stock rose on 54% of the occasions in the next twenty-one days.

This pattern suggests a higher chance of a rise in TTWO stock over the next five days, the next ten days, and the next month.

Take-Two Interactive (TTWO) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: FDS highest at 4.2%; DOX lowest at -8.6%
  • Ten-Day Return: FDS highest at 0.6%; TTWO lowest at -9.6%
  • Twenty-One Day Return: FDS highest at 1.3%; TTWO lowest at -9.2%

While TTWO stock may see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Ashland vs. Microsoft.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Apr 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 TTWO Return -11% -23% 179%
 S&P 500 Return -2% -6% 99%
 Trefis Multi-Strategy Portfolio -2% -9% 257%

[1] Month-to-date and year-to-date as of 4/21/2022
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates