On Friday, BMO (TSX:BMO) Capital Markets maintained its Outperform rating and $185.00 price target for Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO). The firm's stance comes after the company reported robust top-line results for the fourth fiscal quarter of 2024. The positive performance was attributed to the success of NBA 2K24 and an unexpected boost from Zynga (NASDAQ:ZNGA) titles, alongside the enduring popularity of the Red Dead Redemption and Grand Theft Auto (GTA) series.
Despite the strong quarter, Take-Two Interactive 's revenue guidance for fiscal year 2025 was considerably lower than analysts' expectations. This was primarily due to the company narrowing the release window for the highly anticipated GTA VI. Initially expected by analysts to launch in early 2025, the release has now been shifted to fall of the same year, which corresponds to roughly the third fiscal quarter of 2026.
The firm acknowledges the delay in GTA VI's release but expresses confidence in the franchise's track record. The Grand Theft Auto series is recognized as one of the most significant in the gaming and entertainment industry. This sentiment is backed by the historical sales figures of GTA V, which has sold over 195 million units.
BMO Capital Markets reiterated its confidence in Take-Two Interactive's long-term prospects. The analyst cited the Grand Theft Auto franchise's global impact and its proven ability to drive significant sales as a reason for maintaining the Outperform rating and a target price of $185.
InvestingPro Insights
Take-Two Interactive (NASDAQ:TTWO) has been a subject of investor interest following its latest earnings report and the rescheduled release of GTA VI. According to InvestingPro data, the company holds a market capitalization of $25.11 billion, reflecting its substantial presence in the gaming industry. Despite not being profitable in the last twelve months, analysts predict a return to profitability this year, which could be a sign of a positive turnaround for the company.
InvestingPro Tips indicate that Take-Two Interactive operates with a moderate level of debt and has had a high return over the last decade. However, it is worth noting that the company's short-term obligations currently exceed its liquid assets, which could be a point of consideration for risk-averse investors. Additionally, the stock is trading at a high revenue valuation multiple, suggesting that the market has high expectations for future growth, likely tied to the success of its flagship titles.
For investors seeking more in-depth analysis and additional insights, there are over seven InvestingPro Tips available for Take-Two Interactive at Investing.com/pro/TTWO. To access these valuable resources, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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