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Wall Street Weighs In on Gaming Stocks in March


Mar. 12 2019, Published 11:34 a.m. ET

Gaming stocks

Gaming stocks are having a mixed year so far. If we consider price action, we’ll see that Electronic Arts (EA) has gained 25.5% YTD (year-to-date) based on its closing price on March 11.

However, Activision Blizzard (ATVI), Take-Two Interactive Software (TTWO), and GameStop (GME) are trading with YTD losses of 7.8%, 12.7%, and 10.8%, respectively.

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Earnings season

Gaming stocks had a terrible earnings season. Worries intensified over revenue growth as Activision Blizzard, Take-Two Interactive, and Electronic Arts missed their top line estimates. Activision Blizzard also lowered its 2019 outlook and said on its earnings call, “Our 2019 outlook assumes that we will not improve in-game monetization as quickly as we would like. And that it is a transition year where we have less new major content to release than we should.”

The gaming industry has been facing some challenges after years of breathtaking growth. There are concerns that the gaming industry has peaked. Furthermore, the competition in the space has increased with the gaming and streaming industries (NFLX) (AAPL) competing for consumers’ time and money. The popularity of free-to-play games such as Fortnite has also affected the gaming industry (TCEHY).

Meanwhile, as some gaming stocks have fallen sharply from their 52-week highs, it would be prudent to see how Wall Street views the sector (NVDA) (AMD). In this series, we’ll look at gaming stocks’ ratings and estimates. We’ll also look at their valuations after the sell-off.

Let’s begin by looking at Take-Two Interactive Software’s ratings in the next article.


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