On Tuesday, shares closed up 0.25% to $28.01.
Analysts are optimistic as the company has the opportunity to sell more games into an ever-increasing console install base, which should grow 69% year over year to 48 million to 49 million units by the end of this year, according to the note.
New consoles are selling faster than prior cycles, and with the company's large console business, which includes games like GTA, Red Dead, and NBA, TTWO is "highly leveraged to this trend," analysts said.
Additionally, for the past five to six years, the company has achieved the highest average metacritic scores in the industry, leaving analysts to have a bullish outlook on its future.
Take-Two Interactive Software develops, publishes, and markets interactive entertainment for consumers worldwide.
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 deteriorating net income, disappointing return on equity 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 7.2%. Since the same quarter one year prior, revenues leaped by 53.7%. 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 32.61%, 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 0.85 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. Despite the fact that TTWO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.54 is high and demonstrates strong liquidity.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 688.6% when compared to the same quarter one year ago, falling from -$30.79 million to -$242.79 million.
- 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.
- You can view the full analysis from the report here: TTWO Ratings Report