Take-Two Interactive (TTWO) reported better than expected results for the fiscal first quarter of 2022 and reiterated its initial outlook for the year. Revenue in the quarter was down 29% compared to the same quarter last year to $711.4 million but better than the $688.97 million that analysts expected.
Earnings also topped estimates, coming in at $1.01 per share against the $0.89 per share that the Street expected. According to CEO Strauss Zelnick, the better than expected results can be attributed to investments in the mobile business, expertise, and the expansion of the creative teams.
Some of the key milestones achieved in the quarter include the acquisition of mobile games company Nordeus for $225 million. Take-Two Interactive also released new content updates for Grand Theft Auto Online and Red Dead Online. (See Take-Two Interactive stock charts on TipRanks)
Management remains optimistic about the growth potential for the interactive entertainment industry and its competitive position within the industry. The strategic position is expected to allow the company to deliver long-term shareholder value.
Zelnick stated, “As we deliver on our expansive multi-year pipeline, we believe that we will achieve sequential growth in fiscal 2023 and establish new record levels of operating results over the next few years.”
Take-Two Interactive is projecting revenues of between $3.2 billion and $3.3 billion for the full year. Revenue in the second quarter is expected to range from $815 million to $865 million.
Yesterday Credit Suisse analyst Stephen Ju reiterated a Hold rating on the stock but raised his price target of the stock to $211 from $205, implying 21.82% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 13 Buys, 4 Holds, and 1 Sell. The average Take-Two Interactive price target of $215.91 implies 24.65% upside potential to current levels.
TTWO scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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