With shares of Take-Two Interactive (NASDAQ:TTWO) trading around $18, is TTWO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Take-Two Interactive is a developer, marketer, and publisher of interactive entertainment for consumers worldwide. The company develops and publishes products through its two wholly owned labels Rockstar Games and 2K, which publishes its titles under the 2K Games, 2K Sports, and 2K Play brands. Its products are designed for console gaming systems, handheld gaming systems, and personal computers, including smartphones and tablets. It delivers its products through physical retail, digital download, online platforms, and cloud streaming services. Rockstar Games is the developer and publisher of the brand Grand Theft Auto as well as other franchises, including L.A. Noire, Max Payne, Midnight Club, and Red Dead.
Recently, Take-Two Interactive announced record-setting first day retail sales of Grand Theft Auto V that exceeded expectations. Sell-through for the September 17 release exceeded $800 million worldwide, not including upcoming launches in Brazil and Japan, setting new records for Take-Two Interactive and the series. The retail figure translates to roughly $640 million wholesale, or around 12 million units, given higher foreign prices. First-day sales exceeded GTA IV sales, roughly $310 million, due in part to a much larger current console installed base, and topped Activision Blizzard’s (NASDAQ:ATVI) recent Call of Duty games. Last year’s Call of Duty: Black Ops 2 sold over $500 million, while Call of Duty: Modern Warfare 3 sold over $400 million in North America and the UK.