Take-Two Interactive: A Year of Modest Gains Amid Market Benchmarks
Take-Two Interactive Software, Inc. (TTWO), headquartered in New York, specializes in developing, publishing, and marketing interactive entertainment products. With a market capitalization of $33 billion, the company offers its games for consoles, handheld devices, and personal computers. These products reach consumers through retail stores, digital downloads, online platforms, and cloud streaming services.
Take-Two’s Stock Struggles Against Market Indices
Over the past year, TTWO’s shares have lagged behind the general market. The company’s stock rose by 20.2%, whereas the S&P 500 Index ($SPX) saw an impressive increase of nearly 32.1%. Specifically, in 2024, TTWO’s stock marked a 16.7% increase compared to the SPX’s growth of 26.2% year-to-date (YTD).
Comparison with the Gaming and eSports ETF
A closer look reveals that TTWO’s performance is particularly weak when measured against the VanEck Video Gaming and eSports ETF (ESPO). This ETF has surged by around 50.9% over the past year, and it achieved a remarkable 46.8% gain YTD, significantly outperforming TTWO.
Q2 Financials Indicate Positive Trends
On November 6, 2023, TTWO shares experienced a slight increase of over 1% following the announcement of its Q2 results. The company’s adjusted earnings per share (EPS) came in at $0.66, surpassing Wall Street’s expectations of $0.42. Moreover, it reported adjusted revenue of $1.4 billion, which represents a year-over-year increase of 4.1%. For the entire fiscal year, Take-Two is projecting revenue between $5.6 billion and $5.7 billion.
Analysts Offer Mixed but Optimistic Outlook
For the current fiscal year ending in March 2025, analysts predict that TTWO’s EPS will rise by 12.1% to $1.02 on a diluted basis. Historically, the company’s earnings have fluctuated, with TTWO exceeding analyst estimates in three of the last four quarters but falling short on one occasion.
A survey of 24 analysts covering TTWO stock reveals a consensus rating of “Strong Buy,” which is based on 19 “Strong Buy” ratings, two “Moderate Buys,” and three “Holds.” This optimism marks an improvement from three months ago, when 18 analysts had rated the stock as a “Strong Buy.”
Price Targets Suggest Future Growth Potential
On November 22, TD Cowen maintained a “Buy” rating for TTWO and increased its price target to $211, indicating a possible upside of 12.3% from current levels. The mean price target across analysts stands at $189.20, suggesting a slight premium to TTWO’s present stock price. Notably, the highest target among analysts is $210, which also implies significant upside potential at 11.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
