Take-Two Interactive (TTWO), a developer and distributor of video games, posted mixed numbers for their fourth-quarter, disappointing and wowing financial experts at the same time.
Take-Two Interactive in the News
The video game producer reported a decrease of 28.4% in revenue from the same time last year, but this actually beat analyst consensus by 15.73%. Q4 revenue came in at $233.2 million, well above analyst estimates of $201.51 million. The higher than expected net revenue for the fourth quarter was due to the video game successes of NBA® 2K14, Grand Theft Auto V®, Grand Theft Auto Online, Borderlands® 2 and BioShock Infinite. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) now estimates that Q1 2015 EPS will be $0.35-$0.25, versus the consensus of $0.16 and they project to earn $120-$135 million in Q1 2015 revenue, versus the consensus of $209.65 million.
What Does This Mean for Take-Two Interactive’s Stock?
Before the latest quarterly numbers were released, Portfolio Grader of InvestorPlace recommended a BUY Take-Two rating. Portfolio Grader noted that the company, “gets A’s in Earnings Growth, Earnings Momentum, Analyst Earnings Revisions, Equity and Cash Flow.” Portfolio Grader believed Take-Two has potential to grow sales even more and recommends a BUY rating. Portfolio Grader has a 0.0% average return per recommendation and a 42% success rate of recommendations.
On the other hand, Brean Capital analyst Todd Mitchell reiterated his HOLD Take-Two rating before the latest quarterly report. Mitchell noted, “Take-Two will need to step up its digital game to drive EPS in fiscal 2015.” Mitchell did acknowledge the company’s record breaking launch of Grand Theft Auto 5, but added, “Looking past GTA, we believe Take-Two will wait another year for the installed base of next gen consoles to grow before releasing the next Red Dead.” Mitchell also argued, “Take-Two has had a lot of success in this regard with games like Borderlands; however, the company’s monetization strategy for GTA 5 remains murky.” Mitchell has a +7.1% average return per recommendation and a 67% success rate of recommendations.
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) has just had a better than expected quarter, but it is unclear what the year ahead will bring.
Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]