Analyst Note| Neil Macker, CFA |
Take-Two reported a mixed end to a challenging fiscal 2022 as non-GAAP fourth-quarter revenue missed and EBITDA beat FactSet consensus estimates. As expected, net bookings for the year fell for the first time since fiscal 2015. However, management remains optimistic for a bounce back in fiscal 2023, with standalone top-line guidance of $3.75 billion-$3.85 billion, implying growth of 10%-13%, in line with our projections. With the Zynga transaction expected to close by the end of May, the pro forma growth rate may come slightly below the standalone one as the mobile firm posted a slight decline in its first-quarter results. Management expects to provide updated guidance with the fiscal first-quarter earnings release in August. We keep our $200 fair value estimate, which incorporates our outlook for the Zynga acquisition, and view the stock as attractive with shares trading in 5-star territory.