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Video Game Makers Plunge: Market Cycles Point Lower

Published 02/06/2019, 12:34 PM
Updated 07/09/2023, 06:31 AM

Summary
  • Electronics Arts (NASDAQ:EA) and Take-Two (NASDAQ:TTWO) were down by as much as -15% on Wednesday morning, after reporting poor earnings results.
  • Our analysis of their respective market cycles points to lower prices, with TTWO already have made an important cycle breakdown.


Electronic Arts (NASDAQ:EA) Stock Weekly Chart

Weekly Electronic Arts

Electronic Arts reported earnings per share of $2.30 and total revenue of $1.61 billion, compared to analyst estimates of $1.94 and $1.75 billion. For this quarter, the video game company guided to $1.2 billion, which was below Wall Street expectations.

EA Cycle Analysis: In analyzing the market cycles for EA, we believe the stock may now it the declining phase of its current cycle. It failed in its resistance zone and us possibly moving towards a cycle breakdown, a move below where it started the cycle. Our target is $58 in coming months

Take Two (TTWO) Stock Weekly Chart
Weekly Take Two

Take Two reported earnings per share of $2.90 and total revenue of $1.57 billion, compared to analyst estimates of $2.75 and $1.48 billion. For this quarter, the company guided to $475 million, which was below the average analyst expectation.

TTWO Cycle Analysis: With regard to the market cycles for TTWO, we can see the stock is now in the declining phase of its current cycle. This one is even weaker than EA, not having made it to the resistance zone and breaking below its cycle low. Our target is below $80 in coming months.

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.

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