This is Why Take-Two Interactive Stock is Exploding

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NBA 2K22 and Grand Theft Auto 5 by Take-Two Interactive Software Inc are seen for sale in a store in Manhattan, New York City

Take-Two Interactive (TTWO) has been explosive.

Over the last week, the gaming stock ran from a low of about $120 to $136.43.  That now puts it well above prior resistance dating back to June 2022.  Today alone, the stock is up $9 a share on a volume spike to 3.03 million, as compared to daily average volume.

Granted, the company did miss on earnings.

While sales of $1.1 billion were above expectations for $1.06 billion, its GAAP net loss of $104 million, or a loss of 76 cents was far below net income of $152.3 million, or $1.30 a year earlier.  The company also forecast revenue of $5.73 billion to $5.8 billion for fiscal year 2023, which is below expectations for $6.32 billion.  Net bookings were up 41% to $1 billion, which was also below forecasts for $1.11 billion.

However, despite the bad news, CEO Strauss Zelnick is still bullish, noting, “Our pipeline for the year continues to look very strong, and we are excited to expand significantly our mobile presence with a best-in-class platform.”

In addition, the company is optimistic about the long-term growth potential of the mobile industry – especially with its acquisition of Zynga.

And, as noted by TheFly.com: Strauss Zelnick said the entertainment business is not recession resistant or recession proof. However, the company has great titles that are resilient over time and has many in the pipeline. The merger with Zynga has gone “vastly better” than anticipated, making Take-Two much more diversified than previously. Going forward, mobile will be a big part of its business. “We’re a cash flow positive business and we have little debt,” he said.