Take-Two’s financial performance
Take-Two Interactive Software’s (TTWO) revenue fell at a four-year CAGR (compound annual growth rate) of 5% to $2 billion in fiscal 2018, which ended on March 31, 2018. Its net income fell at a four-year CAGR of 3% to $461.3 million. Its revenue fell 7% to $388 million in the first quarter of fiscal 2019, which ended on June 30, 2018.
The company’s products are delivered via digital online services and physical retail and other services. Its digital online distribution channel constituted 81% of its revenue. Its physical retail distribution channel made up the rest of its revenue.
The company’s Console segment generated 76% of its revenue, and the PC platform generated the rest. Games such as Grand Theft Auto Online, Grand Theft Auto V, NBA 2K18, Dragon City, Monster Legends, WWE SuperCard, and WWE 2K18 were the segment’s primary revenue drivers.
Higher consumer expenditure on Grand Theft Auto Online and NBA 2K18 and enduring demand for Grand Theft Auto V drove the company’s revenue growth. Its net income fell 73% to $13.4 million. The company is optimistic about the launch of Rockstar Games’ Red Dead Redemption 2, NBA 2K19, and WWE 2K19.
How do the forecasts look?
TTWO’s revenue projections are $2.8 billion, $2.8 billion, and $3.2 billion, respectively, for fiscal 2019, fiscal 2020, and fiscal 2021. Its expected net incomes for these years are $541 million, $614 million, and $741 million, respectively. The stock has “strong buy,” “buy,” and “hold” recommendations from seven, ten, and three analysts, respectively. Its expected PE ratios are 26.6x, 23.8x, and 19.6x, respectively.
The stock compared to the NASDAQ
At the end of last week, TTWO had beaten the NASDAQ Composite Index in the last three months, in the last year, and year-to-date. The stock closed at a 13% discount to its 52-week high and a 32% premium to its 52-week low at the end of the week.
Recent game launches
In August, TTWO partnered with HB Studios to make The Golf Club 2019 featuring PGA TOUR available on PlayStation 4 and Xbox One.
In September, the company announced the availability of NBA 2K Playgrounds 2 on PlayStation 4, Xbox One, Nintendo Switch, and Windows PC starting in October. It also announced the availability of Sid Meier’s Civilization VI for Nintendo Switch.
In October, the company disclosed the worldwide availability of WWE 2K19 for PlayStation 4 and Xbox One. The company also announced the availability of Borderlands 2 VR for PlayStation 4 starting in December.