How is Take-Two Interactive Doing After an Up-And-Down Year?

This week, in our Stock of the Month Podcast, we look back at one of our previous picks to see how it’s doing following a major acquisition.

Last week, our Head Analyst, Rory, chose MyWallSt’s latest Stock of the Month pick — which you can access here by starting a free trial with MyWallSt.

This week, Rory sat down with Stock Club Podcast host, James Dunne, to discuss the thesis behind his pick, and give an update on one of our previous Stock of the Month picks — Take-Two Interactive (NASDAQ: TTWO).

Is mobile the way forward for gaming?

This very month in 2021, we selected Take-Two Interactive as our Stock of The Month. A big part of that pitch was centered around the opportunity for Take-Two and its intellectual property (IP) around this whole growing idea of the Metaverse. As part of our latest Stock of the Month Podcast, our Head of Content and Publishing, James, quizzed our Head Analyst Rory on how that thesis is playing out.

The stock is currently down roughly 26% year-to-date following the widespread hammering of tech-related stocks, but Rory doesn’t feel it’s all doom-and-gloom:

Like a lot of growth stories, it’s fallen out of favor with investors at the moment. And the Metaverse elements — we’re still far too early days to focus on that. That’s a real kind of five to ten-year story. But as a business in the last twelve months has been performing moderately well. It was, let’s say it was a challenging year for them. Revenue came in a bit shy of expectations in the last quarter, but there was some kind of encouraging signs on the profitability side. There have obviously been some shifts in the last year.

This was one of the stocks that did well in the pandemic when people were locked in and that’s eased off. The world has opened up again. We’ve returned to life outdoors. The real big news of the last year was their acquisition of Zynga, which just closed there I think it was just last month. It’s a mobile gaming company that rose to prominence with Farmville. 

A concerted effort on mobile gaming appears to be a huge focus for Take-Two moving forward. Mobile has been an area that it was most certainly lacking in, so this acquisition and how it gets developed will be interesting moving forward. With the exceptional IP owned by Take-Two, potentially developing these for a mobile audience could pay rich dividends in the future.