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 Reputable investment firm William Blair and Company has revealed that game developer THQ is likely to experience significant growth figures in its stock and sales this year and well into the next several fiscal seasons.
The Chicago firm has taken the initiative to cover THQ's progress as it enters the new era of video games, branding the company's rating as "outperform" and predicting an "aggressive growth" for the company in the years to come.
Analyst Ralph Schackart commented on the issue, noting that.
...THQ is well positioned to experience multiple expansion, to a range from 20 times to 30 times, during the upcoming cycle given its stronger balance sheet, growing stable of owned properties, and ability to take market share, scale margins, and continue to deliver above-market growth."
And Schackart had good reason to be optimistic on the THQ matter. Experts predict that the $1.21 per share that THQ is earning this year may very well see a $ .15 rise next year. In the last quarter of 2006, THQ declared a 32 percent rise in profits to cap off a successful year that defied all market speculations.
“In addition, we believe THQ’s multiple can expand to roughly 35 times (or higher) if the development of incremental market opportunities (in-game advertising and micro-transactions, among others) materializes for the industry,” adds Schackart.
The analyst also said that aside from the $16 billion that the company already makes from publishing, THQ is also likely to get an additional $ 7 million from incremental deals from advertising and other commitments.
The growing market confidence in THQ and its products is likely to trickle down into the root levels in the form of stock investors buying more shares to push the company's collective value up a few more notches.
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