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Take-Two Slips on EPS Miss, Analyst Reactions Mixed

Published 08/09/2022, 06:49 AM
Updated 08/09/2022, 06:58 AM
© Reuters Take-Two (TTWO) Slips on EPS Miss, Analyst Reactions Mixed

© Reuters Take-Two (TTWO) Slips on EPS Miss, Analyst Reactions Mixed

By Senad Karaahmetovic

Shares of Take-Two Interactive (NASDAQ:TTWO) are down almost 3% in premarket trading after the company missed adjusted EPS estimates for the first fiscal quarter. The FQ2 and FY adjusted EPS guidance also missed expectations.

The video game maker reported an FQ1 adjusted EPS of 71c, well below the consensus estimates of 85c per share. Adjusted revenue came in at $1 billion, up 41% YoY and above the expected $984.1 million.

TTWO reported $956 million in Digital Online net bookings, up 41% YoY, and smashing the consensus projection of $696.6 million. The company reported console net bookings of $503.8 million, up 2.5% YoY, while analysts were looking for $540.4 million.

For the second quarter, Take-Two expects adjusted EPS in the range of $1.25 to $1.35, short of the analyst expectations of $1.57 per share. The company expects FQ2 adjusted revenue in the range of $1.50 billion to $1.55 billion, compared to analysts’ estimates of $1.51 billion.

For the full fiscal 2023, TTWO expects adjusted EPS in the range of $4.60 to $4.85, well below the analyst consensus of $5.42 per share. FY adjusted revenue is expected to range between $5.8 billion and $5.9 billion, beating the expectations of $5.42 billion.

A Stifel analyst reiterated a Buy rating on TTWO stock but cut the price target to $180 from $195.

“We remain positive on Take-Two's robust development pipeline, which alongside Zynga, should drive meaningful growth over the next several periods,” the analyst said in a note.

A Raymond James analyst is less optimistic as he reiterated a Market Perform rating.

“This quarter did not give much to tide investors over until GTA news hits (which our model now assumes beyond FY24 given the reallocation of resources from Rockstar’s online titles and the number of as-yet unfilled positions at Rockstar). If anything, the messiness of the print is likely to limit enthusiasm until core trends become clearer,” he wrote in a note.

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