Take-Two Interactive Software (TTWO) In A Perilous Reversal

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Take-Two Interactive Software ( TTWO) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Take-Two Interactive Software as such a stock due to the following factors:

  • TTWO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $99.4 million.
  • TTWO has traded 394,065 shares today.
  • TTWO is down 3.2% today.
  • TTWO was up 18.3% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in TTWO with the Ticky from Trade-Ideas. See the FREE profile for TTWO NOW at Trade-Ideas

More details on TTWO:

Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels. Currently there are 7 analysts that rate Take-Two Interactive Software a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Take-Two Interactive Software has been 1.8 million shares per day over the past 30 days. Take-Two Interactive Software has a market cap of $2.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.57 and a short float of 21% with 3.97 days to cover. Shares are down 13.7% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Take-Two Interactive Software as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • TTWO's very impressive revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues leaped by 53.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, TTWO's share price has jumped by 26.76%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • TTWO's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that TTWO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.54 is high and demonstrates strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 688.6% when compared to the same quarter one year ago, falling from -$30.79 million to -$242.79 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, TAKE-TWO INTERACTIVE SFTWR's return on equity significantly trails that of both the industry average and the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla

Soaring Nickel Prices Could Be Bad News for Electric Carmakers Like Tesla

Video: The Road to S&P 500 2,800 Is 'Slow and Choppy'

Video: The Road to S&P 500 2,800 Is 'Slow and Choppy'

Let the Najarian Brothers Help You Generate Income With Options

Let the Najarian Brothers Help You Generate Income With Options

Oil Stocks Jump as Global Crude Oil Rally Gains Steam

Oil Stocks Jump as Global Crude Oil Rally Gains Steam

P&G Tops Forecasts in Early Q3 Earnings Release Following Merck KGaA Deal

P&G Tops Forecasts in Early Q3 Earnings Release Following Merck KGaA Deal