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Why Take-Two Could Beat Again

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Shares of Take-Two Interactive Software, Inc. (NASDAQ: TTWO) fell more than 1 percent on Monday morning, as the company prepares to report its fourth quarter financial results after the market closes.

According to Estimize, while the company expects to see a 5 percent year-over-year decline in earnings, analysts and the crowd project an increase of more than 23 percent.

And, as it can be seen in the chart below, Take-Two has a history of beating both its own guidance and estimates.

The Figures

For the fiscal fourth quarter of 2015, the company guided earnings of $0.20 per share on revenue of $435 million. Meanwhile, both the Street and the crowd anticipate consensus earnings of $0.26 per share, on revenue of $460.6 million and $452.4 million, respectively.

Related Link: What Gaming Investors Need To See Before Earnings

These figures compare to earnings of $0.21 per share and revenue of $233.2 million reported in the fourth quarter of 2014. However, they also represent a big quarter-over-quarter fall, from last quarter’s EPS of $1.87 and revenue of $953.97 million.

Figuring Out The Figures

In a recent report, analysts at Credit Suisse updated their estimates for video game companies to better reflect the strong US dollar.

According to the note, the analysts made the following adjustments to their Take-Two model: “1) shifted GTA V PC SKU to 1QFY16 2) removed Agent from our release slate 3) increased our estimates for Evolve 4) Added a WWE 2k15 PC SKU to 1QFY16.”

The EPS estimates for fiscal 2015, 2016 and 2017 have been trimmed from $0.27 to $0.25, from $1.28 to $0.98 and from $3.48 to $3.35, correspondingly.

The firm reiterated a Neutral rating on the stock, and reduced its price target from $33 to $32.

In addition, analysts at Brean Capital expect results to surpass both guidance and consensus this quarter on the back of “better-than-expected long-tail sales for ‘Grand Theft Auto V’ and associated DLC revenue,” a recent Benzinga article stated. The firm maintains a Buy rating and a $35 price target.

Posted-In: Brean Capital Credit Suisse Estimize Grand Theft Auto GTAAnalyst Color Previews Trading Ideas


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