Take-Two's Pre-Zynga Success

May 17, 2022

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Take-Two's Pre-Zynga Success

Shares of Take-Two Interactive (Nasdaq: TTWO) jumped 5.15% in after-hours trading on Monday after the video game company posted positive financial earnings.

Financials: Take-Two reported earnings per share of 95 cents and revenue of $930 million; both were better than expected.

The Good: Net revenue increased 11% year-over-year. Recurrent consumer spending went up 1%. Strong releases such as NBA® 2K22, Grand Theft Auto® Online, and Tiny Tina's Wonderlands® were among the biggest reasons why revenue shot up.

The Bad: Net bookings reached $846 million, which is up 8% year-over-year, but below estimates. The company expects revenue to be $3.75 billion to $3.85 billion in the next fiscal year, which was also below estimates.

Combination Time: Take-Two’s previously-announced merger with video game company Zynga (Nasdaq: ZNGA) is still pending but expected to close on May 23. It still needs approval from the shareholders.

Numbers: Take-Two’s stock is down 37% in the past six months but is up 2% in the past week.

Final Thoughts: Take-Two’s proposed merger with Zynga sounds great for investors. This is a stock that did very well during the pandemic lockdowns. However, in a world without lockdowns, will consumers play fewer video games?

Notables

Notable Earnings Today: Walmart (NYSE: WMT), Doximity (NYSE: DOCS), Home Depot (NYSE: HD), Keysight (NYSE: KEYS), Sea Ltd. (NYSE: SE), DLocal (Nasdaq: DLO), JD.com (Nasdaq: JD), Agilysys (Nasdaq: AGYS), AerCap Holdings (NYSE: AER), QuickLogic (Nasdaq: QUIK), Palatin Technologies (NYSEAMERICAN: PTN), NextGen Healthcare (Nasdaq: NXGN), Quipt Home Medical (Nasdaq: QIPT), Container Store Group (NYSE: TCS), Janus International Group (NYSE: JBI), Lulu’s Fashion Lounge Holdings (Nasdaq: LVLU), QualTek Services (Nasdaq: QTEK), Allot (Nasdaq: ALLT), HUYA (NYSE: HUYA), Jumia Technologies (NYSE: JMIA).

Notable IPOs Today: OKYO Pharma Ltd (Nasdaq: OKYO), Zi Toprun Acquisition Corp. (Nasdaq: ZTOPU).

Notable Equity Crowdfunding Campaigns Ending Today: The Cactus (Honeycomb), Hieber’s Pharmacy (Honeycomb), Corrective Skin Care (Honeycomb), Knead Local (Honeycomb), Bae Bae’s Kitchen (Honeycomb), Gobekli (NetCapital).

Notable Economic Events Today: Retail Sales (8:30 a.m. ET), Industrial Production (9:15 a.m. ET), Business Inventories (10:00 a.m. ET), Retail Inventories (10:00 a.m. ET), API Weekly Crude Oil Stock (4:30 p.m. ET).

United Airlines See Stronger Demand

Photo by Arkin Si / Unsplash

Shares of United Airlines Holdings (Nasdaq: UAL) increased 3.31% in after-hours trading on Monday after the company delivered a surprise second-quarter update.

The Good: In a filing with the SEC, United Airlines said: “The demand environment has continued to improve, resulting in a higher unit revenue outlook for the second quarter 2022.” The company now expects its revenue per available seat mile to jump from 17% to 23%.

The Bad: United Airlines also warned that it is seeing higher fuel prices. Its average fuel price per gallon is expected to be $4.02 instead of $3.43.

Final Thoughts: Other airlines might also see this stronger travel demand, but the higher fuel prices could also be an industry-wide concern.

The Advantages of Utility Stocks

In a year when most sectors have struggled, stocks in the utility industry are thriving. Why should investors consider this sector?

Constant: Utilities are not discretionary. Consumers continue to pay their utility bills even during times of economic uncertainty.

Defensive: Utilities are also considered to be a defensive play that is less volatile and offers more steady growth over time.

Final Thoughts: With renewable energy becoming more popular, the utility sector could be a popular investment opportunity for years to come.

Trends to Watch

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