1. Take-Two Interactive Software, Inc. (NASDAQ:TTWO)
Number of Hedge Fund Holders In Q2 2024: 48
Projected EPS Growth Rate: 60.5%
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is a New York City-based video gaming company. It is behind some of the most well-known video game brands in the world, such as Grand Theft Auto and Red Dead Redemption (Rockstar Games is owned by Take-Two). Consequently, Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s narrative depends on the firm’s ability to regularly launch video games and increase its bookings over time. The firm is currently preparing to launch GTA VI in 2025, and the game–along with other titles–is responsible for the fact that it is at the top of our list. This is because successful video game titles add to Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s revenue, and apart from GTA, other upcoming titles for 2025 include Borderlands 4, Sid Meier’s Civilization VII, and Mafia: The Old Country. As a result, successful launches tend to create tailwinds for the stock, while consistent delays can create trouble.
During its fiscal Q4 2024 earnings call, Take-Two Interactive Software, Inc. (NASDAQ:TTWO)’s provided its outlook for the coming years and the current quarter:
“As development advances, our confidence in the title and its potential commercial impact continue to grow. That said, we are not providing specific guidance beyond fiscal 2025, as our release schedule includes numerous titles each year and even modest shifts can have a significant effect on results in any given period. Our outlook for the lifetime value of our pipeline remains as strong as ever and we expect sequential growth in net bookings in Fiscal 2025, 2026, and 2027. Now, moving onto our guidance for the fiscal first quarter. We project net bookings to range from $1.2 billion to $1.25 billion, compared to $1.2 billion in the first quarter last year. Our release slate for the quarter includes TopSpin 2K25, No Rest for the Wicked on Early Access for PC and NFL 2K Playmakers, all of which have already released, and Star Wars Hunters.
The largest contributors to Net Bookings are expected to be NBA 2K, the Grand Theft Auto series, Toon Blast, Empires & Puzzles, our hyper-casual mobile portfolio, Match Factory, the Red Dead Redemption series, Words With Friends, and Zynga Poker. We project recurrent consumer spending to increase by approximately 1%, which assumes mid single-digit growth in mobile, flat results for NBA 2K, and a decline for Grand Theft Auto Online. We expect GAAP net revenue to range from $1.3 billion to $1.35 billion. Operating expenses are planned to range from $928 million to $938 million. On a management basis, operating expenses are expected to grow by approximately 14% year-over-year, which is primarily driven by additional marketing for Match Factory, partially offset by our cost reduction program.”
TTWO is one of the top stocks with the highest consensus earnings growth according to BofA. While we acknowledge the potential of TTWO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TTWO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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