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Take-Two Interactive Software Inc TTWO

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Morningstar’s Analysis

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PREMIUM

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Economic Moat

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Capital Allocation

PREMIUM

Take-Two Posts Strong Q2; M&A Activity Unimpeded by Pandemic

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Take-Two reported a strong fiscal 2021 second quarter as revenue and EBITDA handily beat FactSet consensus expectations. Results were driven by stronger-than-expected digital performance as core titles like NBA 2K and Red Dead benefited once again from gamers staying at home due to the pandemic. Management updated its fiscal 2021 guidance with net bookings now expected to be up 5%-9% year over year despite the company not releasing any new major, nonannualized titles in the coming year. We are maintaining our narrow moat rating and expect to modestly raise our $148 fair value estimate due to a stronger fiscal 2021 and improved margin expansion from the higher-than-expected digital uptake. 

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Company Profile

Business Description

Found in 1993, Take-Two consists of two wholly owned labels, Rockstar Games and 2K. The firm is one of the world's largest independent video game publishers on consoles, PCs, smartphones, and tablets. Take-Two's franchise portfolio is headlined by "Grand Theft Auto" (220 million units sold) and contains other well-known titles such as "NBA 2K," "Civilization," "Borderlands," "Bioshock," and "Xcom."

Contact
110 West 44th Street
New York, NY, 10036
T +1 646 536-2842
Sector Communication Services
Industry Electronic Gaming & Multimedia
Most Recent Earnings Sep 30, 2020
Fiscal Year End Mar 31, 2020
Stock Type Aggressive Growth
Employees 5,800

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