'Grand Theft Auto' Steals The Show In A High-Octane Quarter From Take Two

Take Two Interactive Software Inc TTWO reported its second-quarter earnings on Tuesday, which by most metrics exceeded Wall Street's expectations. The video game maker benefited from strong interest across multiple games, including "Grand Theft Auto" and "NBA 2K."

The Analyst

Credit Suisse's Stephen Ju.

The Rating

Ju maintains a Neutral rating on Take Two's stock with a price target boosted from $95 to $116.

The Thesis

Take Two reported yet another "high quality" earnings with strength coming from in-game micro transactions on "GTA Online," ongoing sales of "GTA 5," and growing contributions from "NBA 2K," Ju wrote in a report. The company is also seeing success in its strategy of hosting regular events in which it is able to monetize the "dedicated" user base.

Encouragingly, fiscal 2018 was setting up to be a "calm" period for Take Two ahead of 2019's "storm" of new releases, the analyst wrote. But now the period of "calm" will be replaced with ongoing strength, particularly in "GTA Online" which also "raises optimism" for similar strength in the upcoming "Read Dead" release.

Price Action

Shares of Take Two were trading higher by more than 10 percent Wednesday and hit a new all-time high of $120.62.

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