2023-11-29 09:55:24 ET
Judging by its stock price rally this year, Wall Street sees nothing but fun and games ahead for Take-Two Interactive (NASDAQ: TTWO) . Shares are up 50% so far in 2023, compared with a 36% rally in the Nasdaq Composite index. Rival Electronic Arts (NASDAQ: EA) is trailing that average, meanwhile, gaining just 12% so far in 2023.
Investors are excited about several big new releases on the way from the video game publisher that could launch it into a much higher level of annual sales in calendar year 2024 and beyond. But there are some major risks to that bullish growth thesis. Let's look at the biggest reason to be optimistic about Take-Two's stock, and the one main reason to tread cautiously right now.
Take-Two's latest results don't conform to what most investors would expect from a growth stock. Net bookings, a measure of sales to consumers, were down 4% in fiscal Q2. Wall Street pros, on average, project just 4% growth for the full 2024 fiscal year.
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1 Green Flag and 1 Red Flag for Take-Two Interactive Stock