Analyst Note| Neil Macker, CFA |
Take-Two posted its second straight weak quarter for fiscal 2023 and management lowered its already relatively underwhelming fiscal 2023 top-line guidance that includes 10 months of contribution from Zynga. The lower guidance was due to game release shifts and lower mobile expectations along with currency headwinds and the impact from the economy. Even with the recent hiccups, management remains very optimistic about the long-term growth potential for the combined business. We largely agree with this take as we expect the extensive game pipeline and proven franchises on console, PC, and mobile to overcome the current challenges facing Take-Two. However, we are lowering our fair value estimate to $165 from $185 to account for lower 2023 projections and slightly lower revenue in 2024.