Take-Two Interactive Shares Soar on Upbeat Earnings, Demand Forecast

Take-Two Interactive (TTWO) is the best-performing stock in the S&P 500 as the video game developer reported better-than-expected sales, and said it expects demand to soar in coming years.

Take-Two’s fiscal fourth quarter net bookings, a form of adjusted revenue, jumped 64.8% to $1.39 billion, above analysts’ forecasts. It was boosted by sales of legacy games such as Grand Theft Auto and NBA 2K.

The company is dealing with a "challenging consumer backdrop," CEO Strauss Zelnick explained, adding that inflation has made gamers more judicious in their spending on entertainment. He indicated that boosts demand for bargain titles and blockbuster games. Zelnick said Take-Two's scale and profit margin will grow as the company executes its strategy and releases what it believes will be "an array of hit titles."

New Grand Theft Auto Speculation

Take-Two noted its forecast for current-year adjusted revenue would be between $5.45 billion and $5.55 billion, short of estimates. Despite this, the company said it anticipates delivering 36 video game titles through 2025 and 2026, with $8 billion in net bookings in 2025 and more than $1 billion in operating cash flow. That has fueled speculation that Take-Two will be releasing a new version of Grand Theft Auto next year, adding to investors' enthusiasm.

Shares of the video game maker jumped 12% today to their highest level in more than a year. They're up almost 35% year-to-date, double a 17% average gain among S&P 500 consumer discretionary stocks in the same period.