Take-Two Interactive Prepares for Earnings Report on May 15, 2025

Take-Two Interactive Software (NASDAQ: TTWO) will report its earnings on Thursday, May 15, 2025. Historically, the stock has shown a tendency for positive one-day returns after such announcements. Over the last five years, TTWO posted a positive one-day return in 61% of cases, with a median return of 5.9% and a maximum return of 14%.

Strategies for Event-Driven Traders

For traders focused on events, understanding these historical patterns can provide a strategic edge. Two key strategies to consider include:

• Pre-earnings Positioning: Given the historical likelihood of a positive one-day return, traders may opt to establish positions before earnings are announced.
• Post-earnings Analysis: Traders could analyze the immediate stock reaction to earnings and its medium-term performance, positioning themselves accordingly after results are disclosed.

Current Earnings Expectations

It’s crucial to recognize that while historical data is informative, actual market reactions depend significantly on how TTWO’s reported earnings align with market expectations. Current consensus forecasts a loss of $0.05 per share on sales of $1.55 billion, compared to a reported loss of $17.02 per share on revenue of $1.35 billion during the same period last year.

Company Financial Overview

Take-Two Interactive holds a market capitalization of $40 billion. In the past twelve months, the company generated $5.5 billion in revenue but faced operational losses of $968 million, leading to a net income of -$3.7 billion.

Historical Performance Post Earnings

In examining one-day (1D) post-earnings returns:

• Of the 18 earnings events recorded in the last five years, 11 resulted in positive one-day returns and 7 in negative returns. This results in positive returns occurring 61% of the time.
• This percentage climbs to 70% when analyzing data from the last three years instead of five.
• The median for positive returns stands at 5.9%, while the median for negative returns is -5.9%.

The summary of observed 5-day (5D) and 21-day (21D) returns post-earnings is included in the table below.

TTWO 1D, 5D, and 21D Post earnings Return

Understanding Returns Correlation

A less risky strategy involves recognizing the correlation between short-term and medium-term returns following earnings announcements. To lower risk, traders should look for pairs with high correlation and execute trades based on post-earnings reactions. For instance, if 1D and 5D returns correlate highly, a trader can invest “long” for the following 5 days after observing a positive 1D return.

TTWO Correlation Between 1D, 5D and 21D Historical Returns

Influence of Peer Earnings Performance

Peer performance can also affect post-earnings stock reactions. Market movements may begin before actual earnings announcements. Historical data on TTWO’s stock performance following earnings from peers can provide insight, illustrating how peer results impact TTWO’s own one-day returns.

TTWO Correlation With Peer earnings

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.