THQ earns analyst praise

THQ rides Cars success to most analysts' recommendations, despite Q1 losses; Wall Street scoops up THQ shares as stock rises 4 percent.

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THQ yesterday posted better-than-anticipated sales figures, but with it came two notable caveats: the cancellation of the Xbox 360's Sopranos game and increased company losses of more than $8 million from the same time last year. Would it spell doom in the eyes of Wall Street and industry analysts? As it turns out, no.

Three analyst groups today echoed one another's calls to buy stock in the company, eyeing the success of THQ's Cars games and the upcoming Saints Row. Despite THQ's losses during its first quarter, the analysts said, the game publisher's results were still better than what the firms had expected.

Thanks to sales of Cars and the anticipated success of Saints Row, "THQ remains our top-pick in the near-term," said UBS analyst Mike Wallace. THQ's key games this holiday season will likely bolster the company as the industry makes the transition to two new next-generation consoles, the Sony PlayStation 3 and Nintendo Wii, he said.

"Four kids titles (SpongeBob, Avatar, Barnyard, Cars) will ship in Q3 for the Wii, which should outsell the PS3 in Q3 due to more units available at launch," he said in a statement.

The positive news from yesterday's earnings call and THQ's upcoming second-quarter lineup of games encouraged Lazard Capital Markets to increase its revenue predictions for THQ.

"We believe THQ has a very solid release schedule planned ahead of the holidays, including key titles Saints Row, Company of Heroes, WWE Smackdown vs. Raw, and several Nickelodeon licenses," said Colin Sebastian, an analyst at Lazard Capital.

"THQ reported Q1 results that were substantially better than our and the consensus expectations" said firm Wedbush Morgan. The company tweaked its THQ forecasts "with slight adjustments to account for the upside generated in Q1," projecting a $31 stock price over the next year.

One of the few naysayers was Janco Partners, which downgraded THQ's stock to a "sell" status.

Like most of the analysts, investors are smiling upon THQ today. After-hours trading yesterday increased THQ's stock price to $22.60--a jump of 2.17 percent from Thursday's market-closing $22.12--and analysts' praise of the company must be spreading: THQ's stock hiked more than 4 percent today, to $23.01, as of press time.

Discussion

23 comments
badash22
badash22

Damn THQ and their bloody cartoon licenceing! It's like a poison in the industry. ....imho They should bring Road Rash to Wii (assuming they still have the rights) I loved playing that on the N64, and a Wii version would be awesome. Nun chuk + triggers to accelerate, brake steer and flick back to pull a wheely, and the wii-mote could be used to smack your mates with weapons! Actually I got no idea who has the rights now since it's been chucked about so much, but it really needs reviving as it was just SO much fun. Sadly, I think EA has the rights to this awesome series and if they do, bring another one out, because I can only take so much Need for Speed.

Riverwolf007
Riverwolf007

the guys doing the stock anayisis are dead on this time they must have played the saints row demo....the guys at janco partners must have kept locking up on them

jgrillot
jgrillot

These guys need to make wrestling games like they did on N64. They still are the best WCW vs nWo Revenge FTW!

JimLad800
JimLad800

Damn THQ and their bloody cartoon licenceing! It's like a poison in the industry. ....imho :D They should bring Road Rash to Wii (assuming they still have the rights) I loved playing that on the N64, and a Wii version would be awesome. Nun chuk + triggers to accelerate, brake steer and flick back to pull a wheely, and the wii-mote could be used to smack your mates with weapons! :) Actually I got no idea who has the rights now since it's been chucked about so much, but it really needs reviving as it was just SO much fun. :P

jcloverboy
jcloverboy

Saint's Row demo is really good - can't wait for the game to hit at the end of the summer.

ak1knight
ak1knight

Cars is actually a fairly good game, I play it with my 5 year-old bro and I actually have fun doing it!

samekila
samekila

cant wait for Saints Row

Sandman100
Sandman100

Saints Row looks like a good game, and it not for little kids. But THQ will be fine because there doing a lot of games for the Wii. There the only third-party publisher to get on the Wii bandwagon early.

Disinfo
Disinfo

Wow, who would have ever thought that Cars would become a savior of a company?

gamer_10001
gamer_10001

Good for THQ, despite the kind of games they put out.

EnclaveNetwork
EnclaveNetwork

Then you haven't seen Company of Heroes, my friend.

assassinX01
assassinX01

I've yet to see THQ put out something better than mediocre in the last few years.

gameloverx
gameloverx

well hope they sell well on the Wii

axel360
axel360

I bet a lot of 6 year kids were happy. :lol: