Take Two Interactive Software Inc (NASDAQ:TTWO) shares are soaring 11% to $88.25, after the game publishing giant reported a strong June quarter, with EPS of $0.41 on revenue of $348 million, compared to Street’s estimates of $0.20 on $281 million, respectively. Looking forward, TTWO provided F2Q guidance for net sales of $465-515 million and implied non-GAAP EPS of $0.65- $0.72, above Street’s estimates of $442 million and $0.64, respectively.
In reaction, Baird’s top analyst Colin Sebastian raised his price target for TTWO to $90.00 (from $80.00), while reiterating a Neutral rating on the stock.
Sebastian commented, “TTWO reported Q1 results above conservative guidance, primarily driven by continuing GTA strength and growth in recurring revenues. While we await Red Dead and other key releases in FY19, we anticipate the ongoing performance of GTA Online and NBA 2K will continue to drive solid catalog sales and potentially further earnings outperformance. We readily admit to missing the surprising trajectory in the GTA franchise, yet look to better visibility for new core franchises to assign a premium multiple.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Sebastian has a yearly average return of 24.6% and a 77.5% success rate. Sebastian has a average return when recommending TTWO, and is ranked #12 out of 4625 analysts.
Out of the 16 analysts polled in the past 12 months, 12 rate Take-Two Interactive stock a Buy, 3 rate the stock a Hold and 1 recommends Sell. With a downside potential of 13.2%, the stock’s consensus target price stands at $76.43.