Take-Two Interactive Software, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

As you might know, Take-Two Interactive Software, Inc. (NASDAQ:TTWO) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 8.2% to hit US$814m. Take-Two Interactive Software also reported a statutory profit of US$1.57, which was an impressive 24% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Take-Two Interactive Software

Taking into account the latest results, the consensus forecast from Take-Two Interactive Software's 24 analysts is for revenues of US$3.56b in 2022, which would reflect a meaningful 8.1% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be US$4.29, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.46b and earnings per share (EPS) of US$3.87 in 2022. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Take-Two Interactive Software 6.3% to US$219on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Take-Two Interactive Software analyst has a price target of US$262 per share, while the most pessimistic values it at US$180. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Take-Two Interactive Software shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Take-Two Interactive Software's revenue growth will slow down substantially, with revenues next year expected to grow 8.1%, compared to a historical growth rate of 20% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Take-Two Interactive Software.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Take-Two Interactive Software following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Take-Two Interactive Software going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Take-Two Interactive Software you should know about.

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