TTWO Stock on an Impressive Upward Trajectory
Take Two Interactive Software Inc (NASDAQ:TTWO) announced its fiscal third-quarter results on Tuesday, and TTWO earnings point towards a better future ahead.
The publisher of super hit video games like Grand Theft Auto V has seen TTWO stock post phenomenal returns of more than 60% over the last one year, as compared to the 25% returned by the S&P 500 index over the same time period.
Take Two stock ended slightly lower in the last trading session, and TTWO stock in after hours trading was showing subdued performance. This is due to the fact that the company has lowered its full-year profit forecast.
The company reported good results for the third quarter of 2017. In the quarter ending December 31, 2016, the net revenue was $476.5 million, which was a gain of 15%. The largest contributors to net revenue were Grand Theft Auto V, Grand Theft Auto Online, WWE 2K17, NBA 2K17, and Sid Meier’s Civilization VI.
Recurrent consumer spending, which means buying virtual currency, getting into microtransactions, and downloading add-on content, made up for 39% of digitally-delivered net revenue, or 20% of total net revenue. The digitally- delivered net revenue grew 64%, to $240.2 million.
Net loss was down to $29.8 million, which translated to $0.33 per diluted share. Total bookings grew 51% to $719.0 million.
Take Two Chairman and CEO Strauss Zelnick was pleased with the company’s highly successful holiday quarter, which saw high consumer demand for the company’s new releases and catalog titles.
Last week, Take Two acquired Social Point, which is a popular free-to-play mobile game developer with a proven track record of revenue growth and delivering a number of hits. Zelnick pointed out that the management wants to prudently use the financial resources of the company without taking excessive risks.
Going forward, Take Two Interactive has a strong development pipeline for the long term, which should keep investors pleased and TTWO stock buoyant. After the huge success of the “Grand Theft Auto” franchise, the company is looking forward to another blockbuster hit with the launch of Red Dead Redemption 2. Take Two stock received a boost in October on this launch news.
Besides the strong TTWO earnings, the company’s management further expects to grow both bookings and net cash provided by operating activities in fiscal 2018. For the full year, the company expects about $350.0 million in net cash provided by operating activities and expects capital expenditures to be around $35.0 million.
The generally accepted accounting principles (GAAP) diluted net income per share could be in the range of $1.15 to $1.25. The company had earlier guided for a profit of $1.80 to $2.09 per share. This is impacting TTWO in after-hours trading.
Investors were quite excited by Q2 TTWO earnings announced in November, and Take Two stock had hit a new high of $49.99. The game maker had beaten all expectations in the second quarter, which resulted in big gains for TTWO stock.
Take Two’s Grand Theft Auto franchise has been a money-spinner for the company and a big boon to TTWO stock. This year will see the launch of Rockstar Games Inc.’s eagerly awaited Red Dead Redemption 2 and will keep Take Two stock interesting for investors.
Moreover, the company’s focus on mobile gaming, with the $250.0-million acquisition of Social Point, will also be a growth catalyst for the company as well as Take Two stock. In a nutshell, the year ahead looks very promising for TTWO stock investors.