Take-Two Reiterates FY Bookings Outlook Despite ‘Unprecedented’ GTA VI Pre-Orders

Shares of Take-Two Interactive Software Inc. (NASDAQ:TTWO) jumped in early trading Monday after the video game publisher reported strong fiscal first-quarter results, prompting analysts to raise their price targets and reaffirm their bullish views on the stock.

Here are the key analyst takeaways:

• BTIG analyst Clark Lampen maintained a Buy rating, while raising the price target from $293 to $313.
• DA Davidson analyst Wyatt Swanson reiterated a Buy rating and price target of $300.

Check out other analyst stock ratings.

BTIG: Take-Two Interactive Software reported its bookings slightly ahead of its guidance, while EBITDA came in line with expectations due to a one-time impairment charge of $43 million, Lampen said in a note. Despite indicating that GTA VI pre-order activity was exceptional and unprecedented, management reiterated its full-year bookings guidance, he added.

The company is scheduled to release its GTA VI extended look on Netflix Inc (NASDAQ:NFLX) on August 27, "which we believe may help steer players toward the Netflix library of GTA/Rockstar titles," the analyst wrote. While the full-year guidance was not changed, it likely reflects stronger GTA V Online engagement, he further stated.

DA Davidson: Take-Two reported its net bookings slightly above the high end of its guidance mainly due to the outperformance of NBA 2K and the Grand Theft Auto series, Swanson said.

While the magnitude of pre-orders is tough to pinpoint, owing to various third parties suggesting a wide range of numbers, management did indicate that the level is "unprecedented," which could point to around 15-20 million copies being sold at launch, the analyst stated.

While the terms of Take-Two’s Netflix partnership were not provided, marketing is likely to ramp up "much more meaningfully following the extended look," he added.

In case GTA VI has a cycle similar to that of GTA V, Take-Two is likely to provide an update on the next gen of GTA Online in October, which could be "the next meaningful catalyst" for the stock, Swanson further noted.

TTWO Price Action: Shares of Take-Two had risen by 2.96% to $253.80 at the time of publication on Monday.

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