Will Take-Two Interactive Stock Bounce Back After Falling 5% In One Week?
[Updated: Sep 24, 2021] TTWO stock update
Last month we talked about it Take-Two Interactive (NASDAQ: TTWO) the stock price could rebound over a period of one month after falling 5% in one week, based on its historical performance. However, TTWO stock has been down more than 8% since then, and it is down 5% in the last five trading days. The recent drop can be attributed to growing concerns about the four-month delay in the game’s release Grand Theft Auto, which means the release will be outside of the holiday season.
More importantly, so far user engagement levels for games, in general, have been higher than before the pandemic, and engagement levels are likely to drop as user rates increase. vaccination and opening up economies. As such, game publishers may be better off releasing games closer to the holiday season rather than later. This has led to some pessimism around TTWO stocks in recent weeks.
As we discussed in our previous update, according to machine learning engine Trefis, which identifies trends in the company’s stock price using ten years of historical data, the returns for the stock average TTWO about 3.6% then period of one month (twenty-one trading days) after experiences a 5% decline from the previous week (five trading days) with a reasonable 62% probability of a positive return over this period. Our dashboard on Take-Two Interactive Share Price Forecast offers more details.
So if this follows historical performance, it is likely that TTWO stock will see a rebound in the future. But if you are considering the TTWO stock as an investment option over a longer period, you can explore our forecast for Take-Two Interactive Assessment.
[Updated: Aug 4, 2021] Decline in TTWO shares
The share price of Take-Two Interactive (NASDAQ: TTWO) has seen a 5% drop in the past five trading days, down from 8% yesterday (Aug 3). The company reported optimistic first quarter 2022 results, with revenue of $ 711 million and adjusted earnings of $ 1.01 per share, well above consensus estimates of $ 686 million from revenue and $ 0.87 earnings per share. While total revenue was down 29%, profits fell 56% on an annual basis. Note that FYQ1 2021 saw massive growth in demand for Take Two’s games as the pandemic spread as people were confined to their homes avoiding other forms of public entertainment.
Despite a bullish performance, TTWO stock plunged 8% due to its outlook for the next quarter and for the full year falling below Street estimates. The company’s forecast of $ 3.2 billion in revenue and $ 3.87 in profits in the middle of the range is well below consensus estimates of $ 3.4 billion in sales and $ 4 billion. , $ 80 earnings per share. Now, as economies open up with an increase in the immunization rate, people have started to venture out of their homes, which will to some extent impact overall user engagement levels for users. games. That said, it is expected to be higher than pre-pandemic levels, which bodes well for gaming companies in general. But Take Two’s revised outlook surely did not bode well for investors.
Now, after falling 5% in one week, will the TTWO stock continue its bearish course over the next few weeks or is a stock rally imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, TTWO stock returns on average 4.1% during the period of one month (twenty-one trading days) after having undergone a 4.6% down from the previous week (five trading days), implying that TTWO stock could rebound in the short term.
But how would those numbers change if you wanted to hold TTWO shares for a longer or shorter period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Take-Two Interactive: Odds of Rising Stocks After Fall. You can test the chances of recovery over different time intervals of a quarter, a month, or even a single day!
Additionally, despite Take-Two having downgraded its annual outlook, its stock is trading at a multiple lower than levels seen in recent years. Our dashboard – Factors behind the variation in the price of Take-Two Interactive’s shares – has more details.
MACHINE LEARNING MOTOR – try it yourself:
IF TTWO stock has moved -5% over five trading days, THEN over the next twenty-one trading days, TTWO has moved an average of 4.1%, with a reasonable probability of 63% of a positive return over this period.
Some fun scenarios, FAQs and a meaning to Take-Two interactive software
Question 1: Is the average Take-Two Interactive Software share return higher after a decline?
Reply: Consider two situations,
Case 1: Take-Two Interactive Software’s stock drops -5% or more in one week
Case 2: Take-Two Interactive Software’s stock increases by 5% or more in a week
Is the average return of the Take-Two Interactive Software share higher in the month following case 1 or case 2?
TTWO actions fares better after case 1, with an average return of 4.1% during the following month (21 trading days) in case 1 (where the stock has just suffered a loss of 5% during the previous week), against an average return 2.2% for case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days in case 1, and an average return of only 0.5% for case 2, as detailed in our dashboard. which details the average return of the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how Take-Two Interactive Software’s stock is likely to behave after a specific gain or loss over a period.
Question 2: Does patience pay?
Reply: If you buy and hold shares in Take-Two Interactive Software, it is expected that over time short-term fluctuations will cancel each other out and the long-term positive trend will be in your favor – at least if the company is otherwise strong.
All in all, according to data and calculations from the machine learning engine Trefis, patience absolutely pays for most actions!
For the TTWO share, the returns over the next N days after a -5% change over the last 5 trading days are detailed in the table below, as well as the returns of the S & P500:
You can try out the engine to see what this chart looks like for Take-Two Interactive Software after a larger loss in the past week, month, or quarter.
Question 3: What about the average return after a rise if you wait a while?
Reply: The average return after a rise is naturally lower than that after a fall, as detailed in the previous question. Interestingly, however, if a stock has won in the last few days, you’d better avoid short-term bets for most stocks.
It is powerful enough to test the Take-Two Interactive Software stock trend for yourself by changing the entries in the charts above.
While TTWO stock may rise in the short term, 2020 has created many price discontinuities which may provide some exciting trading opportunities. For example, you’ll be surprised at how counterintuitive stock valuation is to Tyler Technologies vs. Take-Two Interactive.
Invest with Trefis Wallets that beat the market
See everything Trefis Price estimates