Is Take-Two Interactive Stock A Buy After Its Fall Following The Zynga Acquisition Announcement?

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[Updated: Jan 12, 2022] TTWO stock decline

stock of Take-Two Interactive (NASDAQ:TTWO) It has seen a decline of 14% over the last month, while it is down 20% as compared to the previous week. TTWO stock rose from around $160 at the beginning of December 2021 to a level of $182 earlier this month, before falling to the level of $143 it currently holds. This decline can be attributed to the announcement of a Zynga acquisition in a $12.6 billion deal, valuing Zynga at $9.86 per share, representing a 64% premium to Zynga’s share price of $6 last week. While the 64% figure may seem high, it should be noted that Zynga stock was being weighed down in recent months, due to declining user engagement levels and changes to Apple’s ad tracking policy.

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Despite a 64% premium, the $9.86 figure is still 20% below Zynga’s 52-week high of $12.32. We believe the deal is a positive for Take-Two
TTWO
Interactive gives its franchisees better access to mobile gaming. On the financial front, Take-Two expects $100 million in cost-savings synergies over the first two years and approximately $500 million of incremental annual net bookings in the coming years. Zynga has made several acquisitions in recent years and improved its revenue growth, a trend that is expected to continue. As such, investors can use the current decline in TTWO stock as a buying opportunity for strong returns over the long term.

That said, what about the near term? Given that TTWO stock is up a good 14% in a month, will it continue its downward trend, or is a rebound imminent? According to historical performance, there is TTWO stock slightly more likely to decline next month, out of 81 cases TTWO stock has seen a decline of 14% or more in twenty-one days over the past ten years, only 38 of them TTWO stock is rising as a result one month later (twenty one trading days). This historical pattern represents 38 out of 81, or TTWO stock expected to rise nearly 47% in the coming month, which means that TTWO stock could see lower levels in the near term. View our analysis Take-Two Interactive Stock Likelies for a Rise for more information.

Hence, if it follows the historical pattern, TTWO stock may see lower levels in the near term. However, we still believe that current levels are attractive and investors are likely to be better off buying the current decline in TTWO stock. It’s also helpful to see how its companions stack up. check out Take-Two Interactive stock comparison with peers Click here to see how TTWO stock compares against peers on important metrics. You can find more useful comparisons like this here peer comparison,

Take-Two Interactive stock returns (recent) compared with peers

  • Five-Day Returns: ZNGA Highs 29.1%; TTWO lowest at -19.9%
  • Ten-Day Returns: ZNGA Highs 31.5%; TTWO lowest at -20.4%
  • Twenty one day return: ZNGA highest at 33.1%; TTWO lowest at -14.1%

Below you’ll find our previous coverage of the TTWO stock where you can track our outlook over time.

[Updated: Sep 23, 2021] TTWO Stock Updates

Last month, we discussed Take-Two Interactive (NASDAQ:TTWO) The stock price can rebound over a period of one month after falling 5% in a week based on its historical performance. However, TTWO stock has since seen a fall of more than 8%, and is down 5% over the past five trading days. The recent decline can be attributed to growing concerns over a four-month delay in the Grand Theft Auto game’s release, meaning the release will kick off the holiday season.

More importantly, user engagement levels for gaming so far are higher than they were before the pandemic, and it is likely that engagement levels will drop with rising vaccination rates and economies opening up. Thus, it would be better for gaming publishers to release games closer to the holiday season rather than later. This has resulted in some disappointment surrounding TTWO stock in recent weeks.

As we discussed in our previous update, the TTWO returns for the stock average according to the Trefis machine learning engine, which uses ten years of historical data to identify trends in a company’s stock price. about 3.6% in the next after a period of one month (twenty one business days) With a reasonable 62% chance of positive returns in this period, it experienced a 5% drop compared to the previous week (five trading days). Our Dashboard is on Take-Two Interactive Stock Price Forecast provides more details.

Therefore, if it follows the historical performance, it is likely that TTWO stock will see a rally going forward. But if you are considering TTWO stock as an investment option over a larger time frame, you can explore our forecast Take-Two Interactive Valuations,

[Updated: Aug 4, 2021] TTWO stock decline

share price of Take-Two Interactive (NASDAQ:TTWO) It has seen a 5% drop in the last five trading days, while it had fallen by 8% yesterday (August 3). The company reported FYQ1 2022 results with revenue of $711 million and adjusted earnings of $1.01 per share, above consensus estimates of $686 million in revenue and $0.87 earnings per share. While overall revenue was down 29%, earnings declined 56% on a year-on-year basis. Note that FYQ1 2021 saw a huge increase in demand for Take Two Games with the spread of the pandemic, as people were confined to their homes, avoiding other public forms of entertainment.

Despite the upbeat performance, TTWO stock fell 8% due to its outlook for the next quarter and below-the-street estimates for the full year. The company’s guidance at the mid-point of revenue of $3.2 billion and earnings of $3.87 is well below the consensus estimate of $3.4 billion in sales and $4.80 in earnings per share. Now, as economies open up with increased vaccination rates, people have started stepping out of their homes, and this will affect the overall user-engagement level for gaming to some extent. That said, it is expected to exceed pre-pandemic levels, which bodes well for gaming companies at large. But Take Two’s revised outlook certainly didn’t bode well for investors.

Now, after a week down 5%, will TTWO stock continue its downward trend in the coming weeks, or is a recovery imminent in the stock? Returns for TTWO stock are generated according to the Trefis machine learning engine, which uses ten years of historical data to identify trends in a company’s stock price. Average 4.1% After experiencing over the next one month (twenty one trading days) period 4.6% The decline in the last week (five trading days) means that TTWO stock could rally in the near term.

But if you are interested in holding TTWO stock for short or long term, how will these numbers change? You can test the answer and many other combinations on the Trefis machine learning engine to test Take-Two Interactive stock rises after fall, You can test your chances of recovery at different time intervals of a quarter, month, or even just 1 day!

Furthermore, despite the fact that Take-Two has revised its full-year outlook lower, its stock is trading at several lower than levels seen in recent years. Our Dashboard – Factors Influencing Take-Two Interactive’s Stock Price Changes – There is more detail.

Machine Learning Engine – Try it yourself:

If TTWO stock rises -5% in five trading days, TTWO stock moves up in the next twenty-one trading days Average of 4.1% with a reasonable 63% chance of a positive return During this period.

Some fun scenarios, FAQs, and Take-Two Interactive Software stock movements to make sense of:

Question 1: Is Take-Two Interactive Software stock’s average return higher after a drop?

Answer: Consider two situations,

Case 1: Take-Two Interactive Software stock falls -5% or more in one week

Case 2: Take-Two Interactive Software stock rises 5% or more in one week

Is the average return of Take-Two Interactive Software stock higher in the month following Case 1 or Case 2?

TTWO Stock fare better after case 1, with an average return of 4.1 per cent over the next month (21 trading days) under Case 1 (where the stock has lost just 5% compared to the previous week), versus an average return of 2.2% for Case 2.

In comparison, the average return of the S&P 500 over the next 21 trading days under Case 1 is 3.1%, and an average return of just 0.5% for Case 2 as detailed in our dashboard, which details The average return for the S&P 500 after a fall or rise.

Check out the Trefis machine learning engine above itself to see how the Take-Two Interactive Software stock behaves after a specific profit or loss over a period.

Question 2: Does patience pay off?

Answer: If you buy and hold Take-Two Interactive Software stock, over time hopefully the near-term volatility will cancel out, and the long-term positive trend will be in your favor — at least if the company is otherwise strong.

Overall, according to the data and calculations of the Trefis machine learning engine, patience absolutely pays off for most stocks!

For the TTWO stock, the returns over the next N days after a -5% change over the last 5 trading days along with the returns for the S&P500 are detailed in the table below:

You can try the engine out to see what this table looks like for Take-Two Interactive Software after big losses in the past week, month or quarter.

Question 3: If you wait a while, what about the average return after the increase?

Answer: As explained in the previous question, the average return after an increase is much lower than after a fall. The interesting thing is that if a stock has gone up in the last few days, then you…

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