Take-Two share price rockets thanks to Grand Theft Auto Online
Video game publisher and developer Take-Two Interactive saw its share price surge by as much as 9% last week when it released earnings that blew analysts’ estimates out of the water. The results were largely down to a creative property that is synonymous with the company, in the minds of most gamers: Grand Theft Auto. Specifically, the online edition of Take-Two’s biggest franchise (GTAO), which has turned out to be far more popular than most observers expected.
Take-Two Interactive had a great week last week thanks to GTAO
SOURCE: Yahoo Finance
Take-Two reported non-GAAP earnings per share of 12¢ last week, against expectations of just 7¢. It also beat on revenue, posting $288 million for the quarter – an easy beat against consensus estimates of $258 million. In large part, the company’s outperformance can be seen as the convergence of two factors: first, the “fortnite effect” that many analysts expected to see make a usually weak quarter weaker hasn’t manifested quite as dramatically as expected. And second, Grand Theft Auto is really popular.
The company’s CEO, Strauss Zelnick, released a statement on Thursday, saying: "Fiscal 2019 is off to a solid start, with first quarter operating results that exceeded our expectations. This performance was driven by better-than-expected recurrent consumer spending on Grand Theft Auto Online and NBA 2K18, as well as robust ongoing demand for Grand Theft Auto V, which is now approaching 100 million units sold-in to date."
Grand Theft Auto is undoubtedly the company’s biggest blockbuster franchise, but it’s not Take-Two’s only cash cow. Later this year, the company plans to release the eagerly awaited Red Dead Redemption 2. According to most industry insiders, this title is on track to become the best-selling game of the year – good news for gamers and investors alike.
Dominion holds Take-Two Interactive in its Global Trends Ecommerce Fund.
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