Does Take-Two Interactive Have a Bright Future?

With shares of Take-Two Interactive (NASDAQ:TTWO) trading around $17, is TTWO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Take-Two Interactive is a developer, marketer, and publisher of interactive entertainment for consumers worldwide. The company develops and publishes products through its two wholly owned labels Rockstar Games and 2K, which publishes its titles under the 2K Games, 2K Sports, and 2K Play brands. Its products are designed for console gaming systems, handheld gaming systems, and personal computers, including smartphones and tablets. It delivers its products through physical retail, digital download, online platforms, and cloud streaming services. Rockstar Games is the developer and publisher of the brand Grand Theft Auto as well as other franchises, including L.A. Noire, Max Payne, Midnight Club, and Red Dead.

Take-Two Interactive has said that global sales of its new video game Grand Theft Auto V were over $800 million within the first 24 hours of the game’s availability. Take-Two likely spent $250 million to develop and market the latest Grand Theft Auto installment. According to a report from Bloomberg, the game is expected to make $1 billion in sales in just one month, which is four times what Take-Two Interactive spent producing the game. This is a good sign for the gaming industry, which struggled in the face of cheap online gamesmade for mobile devices.