TTWO Earnings Preview: Call Buyers Bet Against the Bears

Take-Two Interactive heads into its September 17 earnings print with one of the sharpest positioning divergences it has seen in months — short sellers building positions at the fastest pace in weeks while options flow skews decisively toward the upside.

The options market is the most bullish signal in the setup. The put/call ratio has dropped to 0.62, more than two standard deviations below its 20-day average of 0.71 — meaning call buying has rarely been this dominant relative to recent norms. That bullish lean in derivatives has persisted even as the stock has pulled back 9.7% over the past month to $222.91, bouncing 3.5% in Monday's session. The borrow market offers no contradiction: availability is extraordinarily loose at 4,855%, with roughly 183 million shares available against a current short position. Cost to borrow has also halved over the past month to just 0.30%. Shorts face no squeeze pressure and are paying almost nothing to hold.

Short interest tells a more cautious story on the positioning side. At 4.6% of free float, SI jumped nearly 29% in a single week — the bulk arriving in one session around September 9-10, following a period of relative stability through August. That spike is notable, but the borrow dynamics suggest opportunistic positioning rather than a conviction bear thesis. The prior article flagged this same divergence. It has sharpened further heading into the print.

On the fundamental debate, bulls anchor their case on the November Grand Theft Auto VI launch window and a pipeline they argue justifies a 2-3 year earnings improvement cycle. The consensus analyst target of $286 implies more than 28% upside from current levels, and the Street moved price targets higher almost unanimously after the August earnings beat — JP Morgan assumed coverage at Overweight with a $310 target, while Roth Capital, Wells Fargo, and BTIG all raised targets into the $293-$313 range. EPS momentum ranks in the 81st percentile on a 30-day basis and the 82nd on 90 days, reflecting a run of positive revisions. Bears counter with the more uncomfortable data: CEO Strauss Zelnick sold nearly $990,000 worth of shares in open-market discretionary transactions on August 10 near the stock's recent peak, and net insider selling across the past 90 days totals over $15 million. The CFO also sold under a 10b5-1 plan in early September. The bear case includes mobile segment softness, execution risk on the broader release slate, and a stock that trades at a PE of 23x while generating deeply negative five-year EBIT growth.

The prior print in early August delivered a 9.1% one-day gain. Thursday's report tests whether that momentum can hold — or whether the CEO's exit near the highs and the sudden short-interest build were the smarter read on what this quarter actually delivers.