On Thursday, Stifel maintained a Buy rating for Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO) shares and raised the price target to $191 from $175. This adjustment follows the company's announcement at Gamescom in mid-August regarding the release schedule of their upcoming video games.
Take-Two revealed that "Borderlands 4" and "Mafia: The Old Country" are slated for release in calendar year 2025, aligning with the company's fiscal year 2026, which spans from April 2025 to December 2025. Moreover, "Sid Meier's Civilization VII" is set for a February 11, 2025, launch, which falls within the fourth quarter of fiscal year 2025.
The firm has updated its financial estimates for Take-Two to reflect the expected launch timings of these titles. For fiscal year 2026, the non-GAAP EPS forecast has been increased to $7.82, up from the prior $7.12, on net bookings of $8.381 billion, marking a substantial 49% increase from the previous $7.907 billion estimate.
The updated projection includes contributions from "Borderlands 4," anticipated to add $305 million during its third-quarter launch window, and "Mafia: The Old Country," expected to contribute $169 million in the first quarter. The revised forecast positions Stifel above the consensus, which stands at $7.69 for non-GAAP EPS and $8.100 billion for net bookings.
For fiscal year 2027, the non-GAAP EPS estimate has been slightly adjusted to $8.07 from $8.01, with net bookings estimated at $8.236 billion, a 2% decrease from the previously anticipated $8.276 billion. This places Stifel's estimations below the consensus for fiscal year 2027, which predicts a non-GAAP EPS of $9.15 and net bookings of $8.278 billion.
In summary, the raised stock price target to $191 per share from $175 represents a potential upside of over 20% compared to Wednesday's closing price. This price target increase reflects a positive outlook on the upcoming game releases and their expected contribution to Take-Two's financial performance.
In other recent news, Take-Two Interactive Software, Inc. has been the subject of various analyst reports. Redburn-Atlantic initiated coverage of the company with a Buy rating, citing the anticipated financial contribution from the upcoming release of Grand Theft Auto VI (GTA VI). TD Cowen maintained a Buy rating on the company, following the announcement of the planned release of Borderlands 4 in 2025.
Deutsche Bank reiterated its Buy rating on Take-Two, following the company's first-quarter fiscal year 2025 results, which showed a slight decrease in bookings and a marginal increase in adjusted operating income. Benchmark also increased its price target for the company, citing an acceleration in medium-term financial growth fueled by specific catalysts and a resurgence in the mobile segment.
Take-Two Interactive has also been dealing with a strike by voice actors and motion-capture artists from the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA). However, analysts from Wedbush Securities expect minimal impact on the company due to the long development cycles of major games and the presence of in-house studios. These are the recent developments for Take-Two Interactive.
InvestingPro Insights
As Take-Two Interactive (NASDAQ:TTWO) gears up for the release of major game titles, the company's financial health and market performance remain key considerations for investors. According to InvestingPro data, Take-Two has a market capitalization of $27.7 billion and is trading at a high EBITDA valuation multiple, indicating a premium placed on its earnings before interest, taxes, depreciation, and amortization. Despite a slight revenue decline of 2.33% over the last twelve months as of Q1 2023, the company showed a quarterly revenue growth of 4.16% in Q1 2023, hinting at a potential turnaround.
InvestingPro Tips suggest that analysts are cautious, with 13 analysts revising their earnings downwards for the upcoming period, possibly reflecting concerns about the company's profitability given that it was not profitable over the last twelve months. However, there's optimism in the air as well, with analysts predicting the company will be profitable this year. Moreover, Take-Two operates with a moderate level of debt and does not pay a dividend, which might be a strategic choice to reinvest in the business during this critical phase of game development and releases.
For investors seeking a deeper dive into Take-Two's financials and market performance, InvestingPro offers additional tips to help make informed decisions. As of now, there are nine more tips available on InvestingPro's platform that can provide further insights into the company's outlook.
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