NEW YORK (TheStreet) -- Shares of Take-Two Interactive Software (TTWO) - Get Take-Two Interactive Software, Inc. Report shares gained by 2.97% to close at $29.78 on Friday, after the video game publisher announced Lionsgate (LGF) will produce a movie based on its Borderlands franchise.
Borderlands is an action role-playing first-person shooter developed by Gearbox Software and published by Take-Two's 2K label. The science-fiction franchise is known for its unique art style, loot-collecting gameplay, and irreverent humor.
Producers Avi and Ari Arad, who previously worked on Iron Man, Spider-Man, The Amazing Spider-Man, X-Men, Ghost Rider, and Blade, will lead the creative team for the feature film.
"This alliance is ideally positioned to create a bold, provocative, no-holds-barred motion picture phenomenon that will delight Borderlands' current legions of fans and captivate moviegoers around the world," Take-Two Chairman and CEO Strauss Zelnick said in a statement.
Separately, TheStreet Ratings team rates TAKE-TWO INTERACTIVE SFTWR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate TAKE-TWO INTERACTIVE SFTWR (TTWO) a HOLD. The primary factors that have impacted our rating are mixed – some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TTWO's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 119.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, TTWO's share price has jumped by 33.06%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- TTWO's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.40 is sturdy.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, TAKE-TWO INTERACTIVE SFTWR's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for TAKE-TWO INTERACTIVE SFTWR is currently lower than what is desirable, coming in at 26.40%. It has decreased significantly from the same period last year.
- You can view the full analysis from the report here: TTWO Ratings Report