New York-based Take-Two Interactive Software, Inc. (TTWO) develops, publishes, and markets interactive entertainment solutions. Valued at $33 billion by market cap, the company's products are for console systems, handheld gaming systems and personal computers and are delivered through physical retail, digital download, online, and cloud streaming services.
Shares of this leading game publisher have underperformed the broader market over the past year. TTWO has gained 20.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.1%. In 2024, TTWO’s stock rose 16.7%, compared to the SPX’s 26.2% rise on a YTD basis.
Narrowing the focus, TTWO’s underperformance is apparent compared to the VanEck Video Gaming and eSports ETF (ESPO). The exchange-traded fund has gained about 50.9% over the past year. Moreover, the ETF’s 46.8% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Nov. 6, TTWO shares closed up more than 1% after reporting its Q2 results. Its adjusted EPS of $0.66 exceeded Wall Street expectations of $0.42. The company’s adjusted revenue was $1.4 billion, up 4.1% year over year. Take-Two expects a full-year revenue in the range of $5.6 billion to $5.7 billion.
For the current fiscal year, ending in March 2025, analysts expect TTWO’s EPS to grow 12.1% to $1.02 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 24 analysts covering TTWO stock, the consensus is a “Strong Buy.” That’s based on 19 “Strong Buy” ratings, two “Moderate Buys,” and three “Holds.”
This configuration is more bullish than three months ago, with 18 analysts suggesting a “Strong Buy.”
On Nov. 22, TD Cowen kept a “Buy” rating and raised the price target on TTWO to $211, implying a potential upside of 12.3% from current levels.
The mean price target of $189.20 represents a marginal premium to TTWO’s current price levels. The Street-high price target of $210 suggests an upside potential of 11.8%.
