Take-Two's Pipeline of New Games and GTA VI Drive Optimism, Analysts Say

Take-Two Interactive Software, Inc TTWO stock is trading higher after the company reported mixed fiscal first-quarter 2025 financial results Thursday.

The results came during an exciting earnings season. Here are some key analyst takeaways.

Goldman Sachs analyst Eric Sheridan maintained a Buy rating on Take-Two with a price target of $186, up from $170.

Wedbush analyst Nick McKay reiterated Take-Two with an Outperform and a $190 price target.

Stifel analyst Drew Crum maintained a Buy rating on Take-Two with a price target of $175.

Benchmark analyst Mike Hickey maintained a Buy rating on Take-Two with a price target of $200.

Goldman Sachs: Sheridan flagged a few critical themes from Take-Two’s first-quarter earnings reports. Take-Two emphasized its confidence in the operating path forward, especially around the content pipeline. The company provided positive commentary around both the GTA series and GTA Online.

Take-Two expressed a constructive tone on the gaming environment against the macro setting. The company laid out the priorities for growth investments as a driver of operating expenditures in fiscal 2025. Sheridan currently expects second-quarter revenue of $1.32 billion and EPS of $0.40.

Wedbush: McKay highlighted the company maintaining its fiscal 2025 guidance, the release window for Grand Theft Auto VI, and its expectation for sequential net bookings growth in fiscal 2026 and 2027.

Mobile continues to be a notable spot for Take-Two, with Match Factory seeing sequential net booking growth of over 50%, and Toon Blast is growing year-on-year for the third quarter. However, the upside from these two games offset the weakness in Take-Two’s hyper-casual portfolio and in some of its older games. The company continues to expect seven immersive core titles for the year.

The analyst noted a significant dip in profitability next quarter due to increased marketing for its mobile games, the addition of Gearbox, and the implication of a large game in fiscal 2027 like Borderlands to fulfill its guidance given a tough comp from GTA VI. McKay revised the second-quarter revenue estimate to $1.45 billion and EPS to $0.45.

Stifel: The re-rating reflects Take-Two’s pipeline of new games and initiatives, including GTA VI, along with leverage to any stabilization or improvement in Free-to-play (F2P) mobile gaming, which collectively should deliver meaningful earnings power, starting with the company’s fiscal 2026.

The analyst did not learn anything incremental regarding the development pipeline. The analyst noted that the NBA 2K virtual currency was slightly softer but at least partially offset by upward momentum for mobile, and thus, recurrent consumer spending (RCS) is tracking to plan.

The fiscal 2025 outlook was left largely intact, followed by what is forecast to be a record net bookings year in fiscal 2026, aided by GTA VI launch. Crum recommends purchasing Take-Two, which is currently a Stifel Select List idea. Crum expects second-quarter revenue of $1.45 billion and EPS of $0.42.

Benchmark: Hickey noted that Take-Two may negotiate with the NFL for a non-exclusive license to challenge Electronic Arts Inc EA Madden’s dominance. According to the analyst, Take-Two’s NFL deal is limited to non-simulation games per the 2K label, including the recently launched NFL 2K Playmakers.

Take-Two CEO Strauss Zelnick has suggested that arranging a FIFA license is more complex than with the NFL, NBA, or MLB, where current partnerships with leagues and players’ associations make talks more straightforward. Given Take-Two’s expanding portfolio and history of producing compelling NFL simulations, Hickey said that 2K Sports might likely be interested in reentering the NFL simulation market.

The decision to keep the same guidance despite the inclusion of Gearbox could mean that no significant titles are scheduled for this year, or it could mean that a new Borderlands game was already accounted for in the original outlook, as per Hickey. Hickey expects second-quarter revenue of $1.43 billion and EPS of $0.36.

Price Action: TTWO shares traded higher by 2.86% at $142.75 at last check Friday.

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