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Take-Two Tops Expectations in Q4; Shares Pop 4%

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Shares of Take-Two Interactive Software, Inc. (TTWO) rose 4% in Tuesday’s extended trading session after the company reported strong bookings and earnings figures in its fiscal fourth quarter. Take-Two is a video game holding company.

The company reported total net bookings of $784.5 million which increased 8% from the year-ago period. Analysts were expecting net bookings of $663.8 million.

Net Bookings from recurrent consumers accounted for 67% of total bookings which grew 17% from the year-ago quarter, driven by strong demand for mobile games.

Meanwhile, earnings per share came in at $1.40 per share, above the consensus estimate of $0.66 per share.

The company reported GAAP net revenue of $839.4 million, up 10% year-over-year, while digitally-delivered GAAP net revenue increased 19% to $753.3 million.

Take-Two CEO Strauss Zelnick said, “In Fiscal 2022, we plan to deliver an exciting array of offerings, including four immersive core releases, of which two will be from new franchises. In addition, we expect Fiscal 2022 to be our second consecutive year of Net Bookings in excess of $3 billion.”

He further added, “With the strongest pipeline in our Company’s history, including many new releases planned for Fiscal 2023 and Fiscal 2024, we will be making significant investments this year to enhance our enterprise in key areas such as creative talent, IT, and other infrastructure. As we continue to grow our business, we believe that we will achieve sequential growth in Fiscal 2023 and establish new record levels of operating results over the next few years.” (See Take-Two stock analysis on TipRanks)

For fiscal Q1, Take-Two projects net bookings to land in the $625 to $675 million range.

For fiscal 2022, the company expects net bookings to be in the range of $3.2 to $3.3 billion.

Following the fiscal Q4 earnings release, Robert W. Baird analyst Colin Sebastian maintained the stock’s price target of $215 (28.2% upside potential) and a Buy rating.

Sebastian commented, “We continue to like Take-Two following F4Q results well above guidance/consensus, and with one of the industry’s leading product portfolios benefiting from an increasingly digital/recurring revenue model.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 5 Buys versus 4 Holds. The average analyst price target of $215.57 implies 28.6% upside potential to current levels. Shares have increased 17.9% over the past year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Take-Two is currently Neutral, as 6 hedge funds increased their cumulative holdings of the stock by 456,400 shares in the last quarter.

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