Take-Two Interactive Software (TTWO): GTA and NBA2K Drive Upside - Baird
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Baird analyst, Colin Sebastian, reiterated his Outperform rating on shares of Take-Two Interactive (NASDAQ: TTWO) and raised his price target to $43.00 (from $37.00).
Take-Two reported solid F1Q17 results, with non-GAAP revenues of $272.6M above the analyst's expectations of $255.6 million, driven by strong continued performance of GTA V (including record bookings for GTA Online) and NBA 2K along with growth in recurrent consumer spending. On the bottom line, EPS of ($0.34) was in line with guidance, although slightly below the analyst's estimate due in part to higher marketing expenses for Battleborn.
Digital revenue increased 12% Y/Y to $172.1M, while recurrent spending grew 18% Y/Y (57% of digital net revenues), driven by continued strength in GTA Online, NBA2K16, and XCOM 2.
Take-Two's increasing mix of recurring revenues helps add visibility to overall financial performance, consistent with broader industry trends. Also, Take-Two's investments in Asia footprint continue to bear fruit, with NBA2K Online reaching over 32M registered users in China.
Shares of Take-Two Interactive closed at $40.57 yesterday.
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