6 Take-Two Analysts Address GTA VI Prospects After Q3 Earnings: 'Rockstar Commits To 2025 Launch'

Take-Two Interactive Software Inc.'s TTWO shares dropped due to a lowered FY25 bookings outlook associated with release timing in its Q3 earnings report.

Here are some key analyst takeaways from the earnings release.

• Oppenheimer analyst Martin Yang maintained an outperform rating for Take-Two.
• Goldman Sachs analyst Eric Sheridan maintained a Buy rating.
• Stifel analyst Drew E. Crum maintained a BUY rating on Take-Two shares
• Wedbush analyst Nick McKay reiterated an outperform rating on Take-Two shares and maintained a $190 price target.
• Baird Equity Research analyst Colin Sebastian maintained an Outperform rating with a lowered price target from $175 to $173.
• Roth Capital Partners analyst Eric Handler suggested a "Buy" rating with a target price raised from $168 to $185.

See Also: Take-Two Interactive Hits 52-Week High, Fueled By GTA 6 Release Optimism, AI Integration

Oppenheimer: TTWO revised FY23 net bookings to $5,315M, down 4% from previous guidance, citing shifts in release dates and softness in mobile advertising and NBA 2K24 sales.

"The company is working on a significant cost reduction program across the entire business to enhance margin, which led to
the removal of $1B target in adj. unrestricted operating cash flow in FY27," Yang wrote. "Also, FY25 bookings target is now reduced to "over $7B", down from $8B. FY26 is still expected to grow Y/Y."

Goldman Sachs: Yang cited Take-Two’s idiosyncratic exposure to thematic elements, including its multi-year content pipeline translating into bookings potential.

The firm has updated its operating estimates for this earnings report and forward management commentary, lowering its price target from $200 to $185.

"Positive momentum around the GTA franchise, as GTA V reached 195mm+ lifetime units sold-in (+5mm QoQ) and GTA Online outperformed internal expects, as anticipation builds around the release of GTA VI in calendar 2025 (trailer was largest video launch ever, incl. 93mm YouTube views in first 24hrs)," Sheridan said.

Stifel: Take-Two has a robust pipeline of new games and initiatives, including GTA VI, the analyst noted. Still, Stifel lowered its price target for TTWO from $188 to $175. Principal risks to this target price include the inherent unpredictability of video game titles, technology changes, exposure to consumer spending, and dependence on specific game releases.

Crum stated: "While this appears to be largely timing-related, and we believe our investment thesis is still intact, the initial reaction to this update is likely negative."

Wedbush: The analyst's price target reflects a roughly 23x multiple applied to the FY:26 EPS estimate of $8.25.

Wedbush suggested that GTA VI may have been delayed beyond FY:25, aligning with previous estimations. "We have no reason to believe that GTA VI has slipped or will slip out of calendar 2025, and we view that possibility as a remote one, particularly since Rockstar has committed to a 2025 launch date," McKay noted.

Additionally, the firm anticipated significant success for GTA VI, projecting sales of over 35 million copies in its first year, which would greatly contribute to bookings and earnings growth.

Wedbush also noted the potential for increased engagement with GTA Online upon the release of GTA VI. Moreover, the analyst highlights Take-Two's diverse portfolio of upcoming games: Take-Two also has the potential for multiple new mobile titles, and has already scheduled Star Wars Hunters for next year. New title Match Factory! from Zynga appears to be performing at the $200 million annual level, and launched only a few months ago," he wrote.

Baird Equity Research: Baird highlighted TTWO's strong product pipeline, increasing mix of online and recurrent revenues, and positive industry trends as factors supporting this rating. However, risks include TTWO's higher-than-average revenue concentration, limited visibility into release timing, and macro challenges.

Baird's investment thesis for TTWO emphasized "high-quality franchises with a seemingly reasonable valuation." The firm stressed the company's strong bookings for key franchises like GTA and NBA, predicting "steady revenue growth" supported by "a larger product pipeline and increasing mix of digital and recurrent consumer spending."

However, Baird cautioned about industry risks, including seasonality, emerging platforms, and competition from online gaming.

Roth Capital Partners: Despite a 9.5% drop in share price post-announcement, Handler advised: "Our opinion towards the quality of upcoming games releases remains high, we see no structural issues, and would be buyers on weakness."

Read Next: GTA VI Trailer Is Second Most Viewed On YouTube, Here's What Ranks Ahead With 361M Views

Image credits: Sergei Elagin on Shutterstock.