On Thursday, BMO (TSX:BMO) Capital Markets maintained its optimistic stance on Take-Two Interactive (NASDAQ:TTWO), increasing the stock's price target to $190 from $185. The firm's analyst cited the company's second-quarter fiscal year 2025 net bookings, which slightly surpassed consensus expectations. This performance was attributed to the robust results of popular titles like Grand Theft Auto (GTA) and Borderlands.
The analyst noted that Take-Two's adjusted operating income exceeded forecasts, benefiting from a deferral in marketing expenses. Despite year-over-year sales of NBA 2K25 remaining consistent, the game experienced significant double-digit percentage growth in average revenue per user (ARPU).
The mobile segment of Take-Two's business also showed strong performance, with a 12% year-over-year increase in bookings. This success was largely driven by the game Match Factory!, which is poised to become the second-largest title for Zynga (NASDAQ:ZNGA), a subsidiary of Take-Two.
The firm reiterated its 'Outperform' rating and 'Top Pick' status for Take-Two's stock, pointing to several key factors that underpin their positive outlook. Among these are the highly anticipated launch of GTA VI, a strong upcoming release slate for the company, and sustained momentum in the mobile gaming sector.
In light of these developments, BMO Capital has raised its estimates and the price target for Take-Two Interactive's shares.
In other recent news, Take-Two Interactive has been making waves with its robust quarterly bookings and earnings.
The company's second-quarter bookings reached $1.47 billion, surpassing Wall Street's forecast of $1.43 billion, largely due to sustained in-game purchases from popular titles like "Grand Theft Auto Online" and "NBA 2K25." Adjusted earnings also exceeded predictions, with 66 cents per share outperforming the forecasted 41 cents per share.
Take-Two Interactive's management has shown confidence in the company's trajectory, particularly its content pipeline leading into fiscal year 2026. This includes high anticipation for the Fall 2025 release of Grand Theft Auto VI and the launches of Borderlands 4 and Mafia "The Old Country" within the same fiscal year.
Furthermore, Goldman Sachs (NYSE:GS) has increased its stock price target for Take-Two Interactive shares to $205.00, up from the previous $186.00, while maintaining a Buy rating on the stock.
In a strategic move to focus on its principal and mobile business growth, Take-Two has sold its Private Division label. Despite a slightly lower forecast for the upcoming quarter, the company has reaffirmed its annual bookings outlook, with expectations of net bookings growth for fiscal years 2026 and 2027.
Take-Two also reiterated its fiscal year 2025 net bookings guidance of $5.55 billion to $5.65 billion, in line with the consensus estimate of $5.62 billion.
These recent developments indicate a positive trajectory for Take-Two Interactive, reflecting the company's ability to capitalize on the strong demand within the gaming industry and the enduring popularity of its flagship gaming franchises.
InvestingPro Insights
Recent data from InvestingPro adds depth to BMO Capital Markets' optimistic outlook on Take-Two Interactive (NASDAQ:TTWO). The company's market capitalization stands at $30.31 billion, reflecting its significant presence in the gaming industry. Take-Two's revenue for the last twelve months as of Q2 2025 was $5.457 billion, with a modest growth of 0.35% over the same period. This aligns with the analyst's observation of consistent performance in key titles.
InvestingPro Tips highlight that Take-Two is trading near its 52-week high, with a strong return of 22.81% over the last three months. This performance supports BMO's decision to raise the price target. Additionally, analysts predict the company will be profitable this year, which could be linked to the anticipated success of upcoming releases like GTA VI.
It's worth noting that InvestingPro offers 13 additional tips for Take-Two Interactive, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable given the dynamic nature of the gaming industry and Take-Two's ambitious release schedule.
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