Kayode Omotosho
4 min read
In This Article:
As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the video gaming industry, including Take-Two (NASDAQ:TTWO) and its peers.
Since videogames were invented in the 1970s, they have gradually taken more share of entertainment time. Ubiquitous mobile devices have powered a surge in “snackable” games that can be played on the go. Over time, games have developed more social engagement features where friends can play games together over the internet. The business models of games publishers have become less volatile due to digitization of distribution, in game monetization, and like Hollywood, an increasing dependence on surefire hit franchises. Covid driven lockdowns accelerated adoption and usage of videogames – a trend that has not slowed.
The 4 video gaming stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 4.9% while next quarter’s revenue guidance was in line.
Luckily, video gaming stocks have performed well with share prices up 36.5% on average since the latest earnings results.
Best known for its Grand Theft Auto and NBA 2K franchises, Take Two (NASDAQ:TTWO) is one of the world’s largest video game publishers.
Take-Two reported revenues of $1.58 billion, up 13.1% year on year. This print exceeded analysts’ expectations by 0.9%. Despite the top-line beat, it was still a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
Take-Two delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 1.6% since reporting and currently trades at $228.73.
Read our full report on Take-Two here, it’s free.
Taking a new twist at video gaming, Skillz (NYSE:SKLZ) offers developers a platform to create and distribute mobile games where players can pay fees to compete for cash prizes.
Skillz reported revenues of $22.41 million, down 11.2% year on year, outperforming analysts’ expectations by 8%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ number of paying monthly active users estimates.
Skillz delivered the biggest analyst estimates beat among its peers. The company reported 124,000 monthly active users, up 2.5% year on year. The market seems happy with the results as the stock is up 70.3% since reporting. It currently trades at $8.99.
Is now the time to buy Skillz? Access our full analysis of the earnings results here, it’s free.
