Shares of Take-Two (NASDAQ:TTWO) gained over 9% in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2023. Earnings per share came in at -$3.62, which may not even be comparable to analysts’ consensus estimate of $0.68 per share. Sales increased by 55.9% year-over-year, with revenue hitting $1.45 billion. This beat analysts’ expectations of $1.34 billion.
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The biggest reason for the discrepancy between the actual earnings per share figure and analyst projection seems to be traced back to two points. One, Take-Two took an impairment charge of $465.3 million connected to “acquisition-related intangible assets.” Two, Take-Two also took an impairment charge of $54.2 million connected to “capitalized software development costs for unreleased and canceled titles.”
Despite that, Take-Two still rolled out some impressive numbers for its second quarter. Fourth quarter net bookings came in at $1.4 billion overall, which was well above even the highest end of previous guidance. Take-Two’s flagship titles, “Grand Theft Auto V,” “Grand Theft Auto Online,” and “Red Dead Redemption 2,” led the way, along with the mobile games under the Zynga banner.
Take-Two management also offered guidance going forward. GAAP Revenue for the full year, scheduled to end March 31, 2024, should come in between $5.37 billion and $5.47 billion, which is well below consensus projections of $6.16 billion. Meanwhile, net cash from operating activities is projected to come in at around $90 million.
Overall, Wall Street has a consensus price target of $134 on TTWO stock, implying 7.18% upside potential, as indicated by the graphic above.