Piper Jaffray Remains Bullish on Take-Two Interactive Software (TTWO) Saying Investors Should Alter Views on GTA Revenue

Piper Jaffray reiterates an Overweight rating and $34.00 price target on Take-Two Interactive (NASDAQ: TTWO) after re-evaluating how to view GTA revenue throughout a cycle. Michael Olson believes that investors should focus on the 4 yr average revenue vs revenue in year 1 or 2 of a launch.

Olson commented, "Take-Two's revenue concentration around Grand Theft Auto (estimated to be about 40% during the current cycle), and gap between launches (5 years between GTA IV and V) has been difficult for some investors to navigate, which, we believe impacts the multiple of TTWO vs. comps. Given the length of GTA cycles, digital revenue from GTA Online, and inconsistent profitability of the company beyond GTA launch years, we believe investors should focus on average GTA revenue throughout an avg 4 yr cycle; applying a multiple to avg. annual revenue and to the remaining ~60% of the business. In doing this analysis, and including the company's $1.1B in cash, we believe the current share price implies a 50% discount on avg GTA revenue and no value to the remaining business. Maintain OW and $34 PT."

For an analyst ratings summary and ratings history on Take-Two Interactive click here. For more ratings news on Take-Two Interactive click here.

Shares of Take-Two Interactive closed at $27.28 yesterday.

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