Investors score with Grand Theft Auto maker: Cramer

Since Jim Cramer last spoke with this video game maker's CEO in January shares have surged 31 percent. "And I think this stock could have even more upside," he said.

The stock is Take-Two Interactive and, largely, Cramer thinks the Street may be underestimating the company's full profit potential.

"See, a lot of people still think of Take-Two is a one-trick pony, a company that's all about Grand Theft Auto," he said, but nothing could be further from the truth.

Source: Take-Two Interactive Software

"Take-Two has several major franchises that can spin off numerous sequels including Red Dead, Max Payne, Borderlands, BioShock, Civilization, and some terrific sports games like NBA 2K, MLB 2K."

Also, Cramer said the company is introducing new titles that are generating a lot of excitement. "For example, this fall Take-Two's publishing a game called Evolve, which took home best in show at the E3 gaming expo last month.."

But Take-Two isn't just a bet on an underappreciated roster of games. Cramer also thinks the Street has failed to realize just how effective Strauss Zelnick has been at turning the company around, since he was appointed CEO in 2007.

"Zelnick, formerly the head of 20th Century Fox and BMG Entertainment's North American division, has worked miracles," Cramer said.

Once facing nearly a half dozen lawsuits, "These days, Take-Two has just one lawsuit, and it's a spurious piece of litigation from Lindsay Lohan, who I think is simply trying to gin up publicity," Cramer said.

"Meanwhile, the company has become a cash machine; at the end of March, they had $510 million in net cash on the balance sheet, equal to almost 30 percent of Take-Two's market cap, and the money keeps flowing in as this company continues to blow away Wall Street's estimates."

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Also, shares are flirting with a 52-week high, a bullish sign, and a number of firms have rated the stock a buy including Cowen and Company, Stifel Nicolaus and Benchmark & Co which has a price target of $25.31.

All told, Cramer sees every reason to believe shares should go higher. "I think it's still a cheap stock and with the forthcoming release schedule, even at $26 it's cheap based on next year's earnings."

Call Cramer: 1-800-743-CNBC

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