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TTWO: After a Dismal Year, Analysts See Better Days Ahead

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Apr. 9 2019, Published 9:15 a.m. ET

Take-Two Interactive Software

Take-Two Interactive Software (TTWO) has seen downward price action of 8.4% in 2019 based on its closing prices on April 8. The stock has underperformed the broader gaming space this year. Activision Blizzard (ATVI) and Electronic Arts (EA) have seen upward price action of 2.9% and 24.1%, respectively, year-to-date.

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For Take-Two Interactive Software, among the analysts polled by Thomson Reuters on April 8, ten analysts recommended a “strong buy,” 12 analysts recommended a “buy,” three analysts recommended a “hold,” and one analyst recommended a “sell” or equivalent rating. Take-Two Interactive Software has received a mean consensus target price of $122.2, which represents a potential upside of 29.6%. The stock’s target price implies the highest upside potential among the stocks that we’re discussing in this part.

Piper Jaffray survey

Piper Jaffray survey found that US male teens are spending 14% of their income on gaming, which is an all-time high. The survey showed that only food and clothing exceed US male teens’ spending on gaming. According to Business Insider, “While ‘Fortnite’ may be taking some share from certain other video games from other publishers, it may also be expanding the market.” One of the concerns for the gaming market has been the success of free-to-play games like Fortnite.

Apex Legends, which Electronic Arts launched earlier this year, is another free-to-play game. The game has received a positive initial response. However, analysts are divided about how the company will monetize the game’s success.

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