TTWO Jumps 8% to Test $229.37 as GTA VI Preorders Outweigh a Bookings Miss

TradingKey - Take-Two Interactive (NASDAQ: TTWO) jumped 8.31% to $224.64 on Tuesday, November 10, after its fiscal second-quarter report, on a day the S&P 500 fell 0.4%. It rose as much as 10.6% during the session, and premarket trading was nearly unchanged at $224.97.

The quarter missed Take-Two's own bookings guidance, but investors looked straight past it. Grand Theft Auto VI launches on Thursday, November 19, and CEO Strauss Zelnick said preorders are at "unprecedented levels."

A Weak Quarter Without GTA VI

Net bookings, the value of games and in-game content sold in the period, fell 18% to $1.60 billion, below the company's $1.62 billion to $1.67 billion guide and the $1.66 billion Zacks consensus. Recurrent consumer spending, the in-game purchases and other repeat spending that made up 81% of bookings, fell 9%, worse than the roughly 5% decline management expected. Mobile bookings also fell to $707.6 million from $818.1 million.

The GAAP loss, under standard accounting rules, narrowed to $0.29 a share from $0.73, far better than the loss of $0.75 to $0.84 Take-Two had guided.

A bookings miss would usually hurt a stock, but this one barely mattered, because it covered a quarter without GTA VI.

GTA VI Preorders Change the Picture

Zelnick said preorders are "far in excess of our initial expectations." Sensor Tower estimates 9.69 million presale units worth about $942 million, already more than the roughly $800 million GTA V made in its first 24 hours, more than a week before launch.

Even so, Zelnick declined to raise guidance, saying the company prefers to "avoid claiming success before it occurs."

Guidance Leaves Room for a Raise

For the December quarter, which includes the launch, Take-Two guided net bookings to $3.35 billion to $3.50 billion and EPS to $1.30 to $1.44. It reiterated full-year bookings of $8.0 billion to $8.2 billion and raised its revenue range to $7.98 billion to $8.18 billion from $7.90 billion to $8.10 billion.

JPMorgan expects $8.3 billion in bookings, above the guide, and estimates the outlook assumes about 34 million GTA VI copies. Jefferies kept a Buy rating and $300 target, while HSBC trimmed its target to $282 from $285. The stock trades at about 32 times the earnings analysts expect over the next year, against a three-year average of 56, according to the Motley Fool.

In my view, the cautious guide leaves room for an upgrade after launch, but expectations are now so high that any launch problem would hit the stock hard.

Take-Two Technical Analysis: Daily Close Above $229.37 Could Open $248.01

That jump shows up clearly on the daily chart. The rally carried TTWO right up to $229.37, where it met the falling trendline from the July high, a line drawn across its lower highs, and sellers pushed back from that level during the session after the earnings report sparked the move. Even so, the rebound from $183.89 earlier this month has been strong, and the stock now holds comfortably above $216.10.

TTWO Price Chart - Source: Tradingview

RSI, a momentum gauge that runs from 0 to 100, has climbed to about 64, still below 70, the overbought line. The MACD, a trend-following momentum indicator, has also turned positive, which confirms buyers are gaining control.

A daily close above $229.37 would break the downtrend and could open $248.01, then $263.22, just below the 52-week high of $265.94. On the downside, $216.10 is the first support, followed by $200.15.

I'm bullish while TTWO holds above $216.10, and a close above $229.37 would confirm the breakout toward $248.01.

Key Levels

• Last close: $224.64, up 8.31% on Tuesday, November 10 (premarket: $224.97)
• Support: $216.10, $200.15
• Resistance: $229.37, $248.01, $263.22
• RSI: 64.49, below the 70 overbought line
• Bullish trigger: Daily close above $229.37
• Bearish trigger: Daily close below $216.10

FAQs

Why did Take-Two stock jump after earnings?

Take-Two rose 8.31% after CEO Strauss Zelnick said GTA VI preorders are at "unprecedented levels," with Sensor Tower estimating about $942 million in presales, which outweighed a fiscal Q2 bookings miss.

What is the Take-Two stock forecast now?

The bias is bullish while TTWO holds above $216.10 on the daily chart. A daily close above $229.37 could open $248.01 and $263.22, while a drop below $216.10 could send it toward $200.15.

Bottom Line

Take-Two missed on a quarter without GTA VI, but the November 19 launch is what the stock trades on now. I expect a push through $229.37 toward $248.01 while TTWO holds $216.10, and a close back below that support would show the launch excitement is fading.