On Wednesday, BMO (TSX:BMO) Capital Markets maintained its Outperform rating and $185.00 stock price target for Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO), a leading developer and publisher of video games. The firm's analyst highlighted investor attention on the anticipated launch of "Grand Theft Auto VI" (GTA VI), acknowledging concerns about potential delays in its release, originally expected in Fall 2025.
The analyst suggests that Take-Two's stock is a worthwhile investment at present, advising investors to view any potential delays in GTA VI's release as opportunities to increase their holdings. The rationale is based on the expectation of a multi-year growth in Bookings, the metric used to measure the company's sales over time.
The recommendation was further supported by an analysis of Sensor Tower data, which indicated enhancements in key mobile titles under Take-Two's portfolio. This improvement is seen as a positive sign for the company's Mobile Bookings, which are projected to continue accelerating.
The firm's analyst emphasized the belief in Take-Two's stock by reiterating the Outperform rating. The maintained price target of $185 and the designation of the stock as a top pick reflect confidence in the company's growth trajectory, despite concerns surrounding the release timing of its next major title, GTA VI.
In other recent news, Take-Two Interactive Software Inc. has had a series of noteworthy developments. The company's shareholders re-elected all nominated directors and approved the current executive pay structure in a recent virtual annual meeting. In addition, the appointment of Ernst & Young LLP as the company's independent auditors for the fiscal year ending March 31, 2025, was ratified.
Take-Two also faces a $44.9 million patent infringement verdict involving its subsidiary, Zynga (NASDAQ:ZNGA) Inc., a decision it plans to challenge. In terms of product releases, the company has launched NBA 2K25 and announced the release schedule for upcoming video games, including "Borderlands 4" and "Mafia: The Old Country" for 2025, and "Sid Meier's Civilization VII" due early 2025. Notably, the company is set to release "Tales of the Shire: A The Lord of The Rings Game" in March 2025, in collaboration with Wētā Workshop.
Analysts from Stifel, Redburn-Atlantic, and TD (TSX:TD) Cowen have maintained Buy ratings for Take-Two. Stifel raised its non-GAAP EPS forecast for fiscal year 2026 to $7.82 on net bookings of $8.381 billion, anticipating significant financial contributions from the upcoming release of Grand Theft Auto VI.
Despite a recent strike by voice actors and motion-capture artists from the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA), analysts from Wedbush Securities expect minimal impact due to the long development cycles of major games and the presence of in-house studios.
InvestingPro Insights
Take-Two Interactive's financial landscape, as revealed by InvestingPro data, presents a nuanced picture that aligns with the article's focus on the company's future prospects. Despite a market capitalization of $27.35 billion, the company is currently not profitable over the last twelve months, with a negative P/E ratio of -25.78. This aligns with the article's emphasis on future growth potential, particularly with the anticipated release of GTA VI.
InvestingPro Tips highlight that Take-Two operates with a moderate level of debt and has shown a high return over the last decade. These factors support BMO Capital Markets' optimistic outlook and their advice to view potential delays as buying opportunities. Additionally, analysts predict the company will be profitable this year, which could be a turning point for Take-Two's financial performance.
The company's revenue of $5.4 billion in the last twelve months, despite a slight decline of 2.33%, underscores its significant market presence. The gross profit margin of 55.58% indicates a strong ability to generate profit from its core business activities, which is crucial for funding future game development and marketing efforts.
For investors seeking a deeper understanding of Take-Two's financial health and growth prospects, InvestingPro offers 5 additional tips that could provide valuable insights into the company's investment potential.
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