Take-Two Interactive Software Inc. (TTWO) is probably going to steal the show on Wall Street today. After Wednesday's close, the Multimedia & Graphics Software maker announced "Grand Theft Auto V" generated $800 million in global sales in the first 24 hours. Humpday – yeah!
Strauss Zelnick, Chairman and CEO of Take-Two said, "Beginning at midnight on Monday, consumers around the world gathered in anticipation to be among the first to experience the evolution of this remarkable series. In North America alone, more than 8,300 stores opened their doors at midnight to welcome fans whose loyalty and enthusiasm were rewarded with what The New York Times called 'the most immersive spectacle in interactive entertainment'. We are incredibly proud of Rockstar Games' creative achievement and could not be more pleased with the success of this launch."
Investors are likely next in line to be "more pleased with the success of this launch." Shares are up more than $1 following the welcome news.
Let's rewind the clock to April 29, 2008 when "Grand Theft Auto IV" was released to see what the future might hold for TTWO share price.
If 2008 is any indication, the stock might not do so well following the initial response. Back when Kung-Fu Panda and Wall-E were movies to see, the game sold more than 3.6 million copies on its first day of availability and six million copies in the first week of availability generating $500 million in sales.
On the day of 2008's release, Take-Two's shares closed at $ 26.63. On June 5, 2008, the stock peaked for the year, closing at $27.65. TTWO shareholders certainly hope history doesn't repeat.
Fast-forward to today, using 2008 as a guide, first week sales for "Grand Theft Auto V" should tack on another 67% to day one's total. And the calculator says, $1.37 billion.
Wall Street forecast sales of $793.85 million for the current quarter. iStock has this funny feeling that some revisions are coming, probably as early as today. On the current consensus of $793.85M, analysts expect EPS of $1.38, which works out to a net-margin of 15.12%. If we carry the projected profit percent across our sales estimate, EPS could come in closer to $2.38, just from "Grand Theft Auto V."
If we are close, Wall Street could add $1 or more to the current fiscal 2014's full-year estimate of $2.51 or $3.51 per share. At a P/E of 10, well, you can do the math.
Overall: iStock believes "Grand Theft Auto V" could be a game-changer for Take-Two Interactive Software Inc. (TTWO). Early numbers will likely lead to a rash of earnings revisions and upgrades, which usually push stock prices higher.