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tickers: TTWO
source: Benzinga
tickers affected by this
| ticker | polarity | why? |
|---|---|---|
| TTWO | positively | The acquisition of Video Games Deluxe by Rockstar Games, a subsidiary of Take-Two Interactive, is expected to positively impact the ticker due to the strategic enhancement of the company’s development capabilities. The integration of a well-established studio known for significant contributions to iconic game titles can lead to more streamlined and innovative game development. This move may result in richer intellectual property and greater revenue streams in the future. |
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summary
Rockstar Games Acquires Video Games Deluxe, Take-Two Interactive Stock Reacts
Rockstar Games, a subsidiary of Take-Two Interactive Software Inc. (TTWO), has announced the acquisition of Sydney-based development studio Video Games Deluxe. The studio will be renamed Rockstar Australia following the acquisition. Video Games Deluxe has been a long-time collaborator with Rockstar Games, contributing to some of its most iconic game titles.
Acquisition Details and Analyst Reaction
The acquisition was announced on Monday, with Rockstar Games highlighting the studio’s significant contributions to its projects. Jennifer Kolbe, Head of Publishing for Rockstar Games, expressed excitement about the integration, stating, “After working together closely over many years, we are excited to have Video Games Deluxe join the team as Rockstar Australia.” In response to the news, Ascendiant Capital analyst Edward Woo maintained a Buy rating for Take-Two Interactive and raised the price target from $172 to $270. This significant increase reflects the analyst’s optimism about the strategic benefits of the acquisition for Take-Two Interactive.
Market Reaction and Stock Performance
Despite the positive analyst sentiment, TTWO shares were trading lower, down 0.24% at $211.47 at the time of publication. The market reaction suggests that investors may be cautious or waiting for more concrete data on the potential benefits of the acquisition.
Key Factors for Investors
When considering whether to invest in TTWO, several key factors should be evaluated:
- Revenue Growth: Take-Two has reported an average annual revenue growth of 12.87% over the past five years, indicating a strong track record of financial performance.
- Valuation: The forward P/E ratio of 26.18 suggests that investors are paying $26.18 for each dollar of expected earnings. This is slightly higher than the average ratio of Take-Two’s peers, which stands at 21.86.
- Profitability and Balance Sheet: Investors should also consider the company’s profitability, balance sheet strength, and performance relative to benchmark indices. The acquisition of Video Games Deluxe is a strategic move for Take-Two Interactive, potentially enhancing its development capabilities and expanding its presence in the gaming industry. The increased price target from Ascendiant Capital reflects the analyst’s confidence in the company’s future prospects.
