5 gaming stocks to watch in Q3: MSFT, NVDA, EA, TTWO & RBLX

The video gaming industry is of the fastest-growing sectors today. The companies engaged in the sector make gaming hardware and software. The Covid-19 pandemic had accelerated its growth as people had relatively more time for leisure activities, especially children, due to travel restrictions.

According to an industry estimate, in 2021, the videogame market was worth over US$195 billion globally. It is expected to grow at a CAGR of over 12% through the next decade. Driven by innovation, the industry is lately becoming immersive and realistic.

Online gaming is rapidly expanding internationally, thanks to social media publicity. But gaming companies also promote themselves through other mass media channels. Here we explore five gaming stocks worth watching this summer. 

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Take-Two Interactive Software, Inc. (NASDAQ: TTWO)

Take-Two Interactive Software is a video game holding company based in New York. It develops interactive entertainment products for global consumers.

Its shares traded at US$124.90 on June 16, down 1.00% from their previous close. The TTWO stock fell around 29% YTD (as of June 16). Take-Two Interactive has a market cap of US$20.24 billion, a P/E ratio of 34.89, and a forward one-year P/E ratio of 37.51. Its EPS is US$3.58.

The 52-week highest and lowest stock prices were US$195.82 and US$101.85, respectively. Its trading volume was 2,072,578 on June 16. The company reported revenue of US$930.00 million in Q4, FY22, while its net income was US$110.97 million, or US$0.95 per diluted share. In fiscal 2022, its GAAP net revenue rose 4% YoY to US$3.50 billion.

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Source: Pixabay

Microsoft Corporation (NASDAQ: MSFT)

Microsoft is one of the world’s leading technology firms specializing in computer software and consumer electronics. It is based in Redmond, Washington.

The stock closed at US$244.97 on June 16, down 2.70% from its previous close. The MSFT stock fell around 24% YTD (as of June 16).

Microsoft’s market cap is around US$1.83 trillion, the P/E ratio is 25.57, and the forward one-year P/E ratio is 26.40. Its EPS is US$9.58. The stock’s highest price was US$349.67, and the lowest price was US$241.51 in the last 52 weeks. Its share volume on June 16 was 33,169,160.

Its revenue soared 18% YoY to US$49.4 billion in Q3, FY22. The net income was US$16.7 billion, or US$2.22 per diluted share, versus US$15.45 billion, or US$2.03 per diluted share, in Q3, FY21.

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Electronic Arts Inc. (NASDAQ: EA)

Electronic Arts is a video gaming company based in Redwood City, California. It develops games and other interactive digital entertainment products for consumers.

Its shares closed at US$127.98 on June 16, down 0.99% from their closing price of June 15. Its stock value plunged 4.22% YTD (as of June 16).

It has a market cap of US$35.82 billion, a P/E ratio of 46.37, and a forward one-year P/E ratio of 23.23. Its EPS is US$2.76. The 52-week highest and lowest stock prices were US$147.76 and US$109.24, respectively. Its trading volume was 2,329,607 on June 16.

The company reported net revenue of US$1.82 billion in Q4, FY22, while its net income came in at US$225 million, or US$0.80 per diluted share. For fiscal 2022, its total net revenue was US$6.99 billion, versus US$5.62 billion in fiscal 2021.

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Roblox Corporation (NYSE: RBLX)

Roblox Corporation is an online gaming platform based in San Mateo, California. It also allows users to play games created by other users. The stock closed at US$24.69 on June 16, down 14.57% from its previous close. The RBLX stock declined 70.75% YTD (as of June 16).

Its market cap is US$14.64 billion, and the forward one-year P/E ratio is -23.29. Its EPS is US$-0.90.

The stock touched a peak price of US$141.60 and the lowest price of US$21.65 in the last 52 weeks. Its share volume on June 16 was 37,915,070.

The company reported a revenue of US$537.1 million in Q1, FY22, representing an increase of 39% YoY. Its net loss attributable to common stockholders came in at US$160.20 million, or US$0.27 per diluted share, against a loss of US$134.21 million, or US$0.46 per diluted share, in Q1, FY21.

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NVIDIA Corporation (NASDAQ: NVDA)

NVIDIA is a leading technology company that manufactures GPUs for the gaming industry and other professional markets. The company is based in Santa Clara, California.

The shares closed at US$156.01 on June 16, down 5.6% from their previous close. The stock plummeted around 45% YTD (as of June 16).

The firm has a market cap of US$390.02 billion, a P/E ratio of 41.83, and a forward one-year P/E ratio of 34.29. Its EPS is US$3.73.

The 52-week highest and lowest stock prices were US$346.47 and US$154.01, respectively. Its trading volume was 54,574,870 on June 16.

The company posted a revenue of US$8.29 billion in the first quarter of fiscal 2023, representing an increase of 46% YoY. Its net income was US$1.61 billion, or US$0.64 per diluted share, against an income of US$1.91 billion, or US$0.76 per diluted share in Q1, FY22.

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Bottom line:

The gaming industry is facing huge challenges in procuring components for game consoles, etc. The double blow of the pandemic and geopolitical tensions is having a devastating impact on supply chains. Still, most analysts predict strong growth for the sector. However, given the volatile nature of the market, investors should carefully evaluate the companies before spending on stocks.