Take-Two Analysts: Zynga Acquisition, Video Game Pipeline Highlight Future Growth

Video game company Take-Two Interactive Software TTWO reported fiscal fourth-quarter financial results Monday. Analysts weighed in with their thoughts on the report and the pipeline of games ahead.

The Take-Two Analysts: Credit Suisse analyst Stephen Ju has a Neutral rating on Take-Two and lowered the price target from $190 to $182.

Raymond James analyst Andrew Marok has a Market Perform rating on Take-Two and no price target.

The Analyst Takeaways: Take-Two reported fourth-quarter revenue that beat the average analyst targets.

Ju said the results “fell short of our estimates.”

Going forward, Ju pointed to several catalysts for the company, with a strong slate of titles set to be released and the near-complete acquisition of mobile game company Zynga Inc ZNGA.

“Management highlighted a robust slate for the next 3 years with 69 titles – 18 planned for FY23, including 6 immersive core, 8 mobile titles, 3 midcore arcade titles and 1 new iteration of a prev-released title,” Ju said.

Ju points to the Zynga acquisition, which Take-Two said should close this month, as being a future catalyst.

“The key focus remains on the revenue synergies TTWO can realize with the anticipated close of the ZNGA acquisition. We continue to believe the primary value unlock scenario will be for TTWO to transition existing Rockstar/2K IP to mobile in a more meaningful way.”

Related Link: Take-Two Q4 Earnings Highlights: Revenue Beat, Strong Digital Sales, Zynga Acquisition Update, Guidance And More 

Marok said the results from Take-Two for the fourth quarter were “better than expected” and highlighted a strong pipeline ahead.

“TTWO also provided a good amount of color on its FY23 pipeline, which is shaping up to be solid with six immersive core releases headlining a total slate of 18 titles,” Marok said.

The analyst said there was no update from the company on its Grand Theft Auto franchise and said the expectation should be for no update in the “immediate term.”

Marok highlighted the success of games in the NBA and World Wrestling Entertainment WWE franchises.

“NBA 2K continues to sell in solidly, and TTWO has seen decent uptake of new GTA content.”

TTWO Price Action: Take-Two shares are up 9% to $120.52 on Tuesday, according to Benzinga Pro. 

Shares of Take-Two have traded between $101.85 and $195.82 over the last 52-weeks.