What Happened?
Shares of video game publisher Take Two (NASDAQ: TTWO) fell 5% in the afternoon session after the company posted a fourth-quarter loss that missed Wall Street's profit expectations, overshadowing strong revenue results and a positive sales forecast for the upcoming quarter.
The video game publisher reported a GAAP loss of $0.50 per share, missing the consensus estimate for a loss of $0.39 per share. This earnings shortfall appeared to be the main concern for investors, despite the company reporting better-than-expected revenue of $1.70 billion, a 24.9% increase from the year-ago quarter. While Take-Two provided an optimistic revenue forecast for the first quarter that topped estimates, its full-year EBITDA guidance fell significantly short of expectations. The market appeared to focus on the bottom-line miss and weaker profit outlook, sending the shares lower.
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What Is The Market Telling Us
Take-Two’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 15.3% on the news that the company reported strong fourth-quarter results and provided quarterly revenue guidance and full-year EPS outlook, which beat analysts' expectations. The company also confirmed its much-anticipated GTA VI title will come out in the fall of this year. The pipeline for the year is also stacked with popular titles, including Civilization VII, Mafia, and Borderlands 4. Management was upbeat about the outlook, with expectations for gradual improvements in net bookings in fiscal 2026 and 2027 as it rolls out its hit titles. Quarterly performance was mixed. Strength in NBA 2K helped counter softness in several mobile franchises, yet weak mobile sales weighed on overall bookings and revenue. The company is counting on Zynga to reverse these trends. Overall, this was a solid quarter.
Take-Two is down 20.6% since the beginning of the year, and at $199.82 per share, it is trading 23.8% below its 52-week high of $262.29 from October 2025. Investors who bought $1,000 worth of Take-Two’s shares 5 years ago would now be looking at an investment worth $991.80.
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