Wedbush Raises Price Target on Take-Two Interactive Software (TTWO) Following Q4 Results and FY2016 Guidance
Wedbush maintains a Neutral rating on Take-Two Interactive (NASDAQ: TTWO), and raised the price target to $26.00 (from $24.00), following Q4 results. Analyst Michael Pachter says that TTWO's EPS beat came despit e lower-than-expected revenue. Revenue was reported at $428M, compared to Wedbush's $470M estimate and $459 consensus. EPS was $0.49, beating Wedbush and consensus estimates of $0.35 and $0.27.
Pachter commented on TTWO, saying, "Take-Two delivered a Q4 EPS beat despite lower-than-expected revenue. Revenue was $428 million, compared with our estimate of $470 million, consensus of $459 million, and guidance of $410 – 460 million. The largest contributors to revenue were GTA V, GTA Online, Evolve, NBA 2K15, and Borderlands: The Handsome Collection. GTA V has now sold-in nearly 52 million units, up from over 45 million units as of early February. Evolve, a February release, has sold-in roughly 2.5 million units to date. EPS was $0.49, compared with our estimate of $0.35, consensus of $0.27, and guidance of $0.15 – 0.25. The EPS beat was driven by a stronger-than-expected gross margin and cost control."
Pachter also added, "Initial FY:16 guidance was in-line with our expectations, and reflects an underwhelming release slate. Initial guidance is for revenue of $1,300 – 1,400 million and EPS of $0.75 – 1.00, compared with prior consensus of $1,512 million and $1.29. The FY:16 releases are expected to include WWE 2K16, NBA 2K16, Sid Meier’s Civilization Beyond Earth - Rising Tide, Battleborn, and an unannounced AAA title from 2K. Importantly, guidance does not appear to include the next full Borderlands game, nor a full Rockstar release."
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Shares of Take-Two Interactive closed at $24.20 yesterday.