Analysts rated how the acquisition of Zynga fits into the video game company’s instructions Take-Two Interactive Software, Inc TTWO.
The Take Two Analysts: Credit Suisse analyst Stephen Ju had a neutral rating and cut the price target to $137 from $139.
Barclays analyst Mario Lu was overweight and raised the price target to $175 from $171.
Raymond James analyst Andrew Marok had a market perform rating and no target price.
The Analyst Takeaways: Take-Two’s first quarter was the first to include results from the completed acquisition of Zynga. The company reiterated $100 million in annual cost synergies within the first two years of its release.
“We reiterate our belief that the primary value unlocking scenario will be Take-Two moving the existing Rockstar/2K IP to mobile in a more meaningful way,” said Ju of Credit Suisse.
The analyst saw delays and macroeconomic uncertainties as concerns going forward.
Raymond James’ Lu said macro concerns over spending and mobile gaming may have led to conservative leadership at the company.
“As we pull away from printing, we believe now is a great opportunity to expand positions ahead of the eventual release of GTA 6 in FY24,” Lu said.
The analyst noted that shares are trading at 14 times and 11 times estimates for fiscal 2023 and fiscal 2024, respectively. This is below a historical range of 15x to 25x and comes with “the most anticipated title to hit the market in 1.5 years”.
Raymond James’ Marok said the company had “decent” results in the first quarter but guidance for the rest of the year was “below expectations”.
The analyst cited strong exposure to console and PC gaming, but mobile titles are seeing more pressure.
“Mobile is becoming more sophisticated as economic pressures mount, limiting near-term optimism,” Marok said.
Marok said the quarter didn’t offer much excitement…