Financial Trading Blog
Stock of the day 07/08/2015 – Take-Two Interactive Software Inc
The company announces its Q1 2016 earnings release on Monday.
Up until the end of January things had been looking good for Take Two; after opening the year at $27.96 the stock had climbed to an all-time high of $30.80 by the end of the month. However February brought with it the company’s third quarter results and a subsequent 3 month decline. Whilst adjusted earnings per share were at $1.81 against the $1.52 expected alongside a 24% increase in non-GAAP revenue year-on-year to $954 million, largely prompted by sales of GTA V and NBA 2K15, these figures couldn’t stop a mass exodus from the stock.
(Source: IT-Finance.com 07/08/2015)
This long-term sell-off dragged Take Two all the way down to $24.90 by the time of its fourth quarter results in the middle of May. However, those results, which saw its adjusted quarterly revenue jump 83% to $427.7 million (but actually miss the $458.9 million expected) alongside a 153% increase in adjusted net income to $53.4 million. This ignited investors’ appetite for the stock in a way that its third quarter report surprisingly couldn’t back in May, causing an 18.3% leap in its price back to $28.63.
By July Take-Two was back in all-time high territory, and a surge in the middle of July helped lift it, by the end of the month, to a fresh closing peak of $31.58. It wobbled away from this price as we entered August, but strong results from Activision Blizzard on Tuesday helped push Take-Two to a current trading price of $31.55 (IT-Finance.com, 07/08/2015).
The most recent quarter has been quiet in terms of releases, as the spring and summer months normally are, meaning Take-Two will likely be reliant on the continued sales of the Borderlands franchise, GTA V (especially interesting will be its PC and DLC sales) and NBA 2K15. It is forecast to post a 132% jump in revenue to $351.1 million alongside earnings per share of $0.36 from a loss of $0.14 the year before.
Take-Two Interactive has a consensus rating of ‘Buy’ with an average target price of $32.72.
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