Rockstar Games Parent Eyes 40% Surge in Shares

Take-Two Interactive could see its shares surge at least 40% as it overcomes challenges prevalent throughout the gaming industry, according to Goldman Sachs. 

The New York-based company that owns major video game publishers including Rockstar Games and 2K has posted underwhelming profits in FY2022 following a surge of interest and spending at the height of the pandemic, due mainly to supply chain disruptions and the ongoing semiconductor shortage.

But Take-Two is poised to return to pre-pandemic levels as it plans to launch new gaming titles, including the next installment of Rockstar’s “Grand Theft Auto” series. The latest title “GTA V” has sold nearly 170 million units worldwide since its 2013 release.

• Goldman Sachs raised its 12-month price target of Take-Two shares from $131 to $165.
• So far in 2022, shares of the company are down around 34%. 

In May, Take-Two completed its acquisition of mobile game developer Zynga, the company behind “FarmVille” and “Words with Friends” for $12.7 billion. The deal was funded with $2.7 billion in financing from JPMorgan Chase, Take-Two’s balance sheet, and a debt issuance.

Take-Two also added to its mobile-related properties in September with the acquisition of Storemaven, a platform that specializes in app store optimization. 

Missed Mark 

Take-Two generated $1.1 billion in revenue in fiscal Q1, up 36% year-over-year.

Its projected adjusted earnings per share will range between $4.60 to $4.85 in FY2023, compared to Wall Street estimates of $5.37.