Chris Lau, Kapitall: Gamers are anxiously awaiting the next release of Grand Theft Auto, but what about the company's investors?
The stock market often reacts ahead of events, discounting or adding a premium for what it expects in the near future. Take-Two Interactive’s (TTWO) stock price is no exception. The company is set to release Grand Theft Auto 5 on September 17, 2013. The stock is up an incredible 86% from its yearly low, and just 4.6% from the $19.25 reached in late August.
[Read more from Kapitall: Ford and GM are Growing: Will Tesla Have to Sell Cars to Compete?]
Expectations highAnalysts have high expectations for Grand Theft Auto. The franchise sold more than 125 million times, so when a new version of the game is released, there is a good chance that initial sales will be very strong. For the week ending August 24, 2013, pre-orders for the game on Xbox 360 were 1.48 million, and 962,800 on the PS3. Analysts have a consensus earnings estimate of $2.51 per share for the fiscal year ending March 2014. For fiscal 2015, the estimate is much lower: $1.03 per share. Other investing ideas The run-up in Take-Two could fall victim to “selling on fact.” This means investors could sell the shares after Grand Theft Auto is released. And there are few alternative gaming stocks available at a discount. Electronic Arts (EA) is up more than 100% over a 1 year period. Activision Blizzard (ATVI) is up nearly 50%. Click on the image below to see analyst ratings over time. Sourced from Zacks Investment Research. Dig Deeper: Compare analyst ratings to annual returns for stocks mentioned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV