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Brean Capital Reiterates on Take-Two Interactive Software as Outstanding Success of GTA V is Fully Priced into Current Valuation

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In a report published Wednesday, Brean Capital analyst Todd Mitchell reiterated a Hold rating on Take-Two Interactive Software (NASDAQ: TTWO).

In the report, Brean Capital noted, “Take-Two blew away expectations with $1.27 billion in net revenue and non-GAAP EPS of $2.49, versus our top of the Street estimates for $1.05 billion and $1.90. The magnitude of the beat was surprising, but there was little surprise in the Rockstar developed franchise re-establishing itself as one of the premier titles in the industry. Take-Two anticipates profitability moving ahead, but is unwilling to prove more than the scantiest of details on how this materializes. Management alluded to a pipeline of 10 next gen titles, including NBA 2K14 which will launch with the new consoles in November, and GTA Online is surely a key potential contributor. However, GTA Online current monetization channel remains suspended, and it is unclear what sort of contribution margin the game can ultimately generate. As a result, we continue to wrestle with a baseline for normalized earnings, but current scenarios show low-$1+ normalized non-GAAP EPS, which we believe is fully priced into the company's current valuation.”

Take-Two Interactive Software closed on Tuesday at $17.95.

Latest Ratings for TTWO

Nov 2018Morgan StanleyMaintainsOverweightOverweight
Nov 2018BairdMaintainsOutperformOutperform
Nov 2018JefferiesMaintainsBuyBuy

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