Take-Two Interactive’s fair value estimate has increased modestly from $266 to $270 per share, as analysts cite robust NBA 2K engagement, steady mobile growth, and optimism around upcoming releases as key drivers of the higher price target.
Analyst Commentary
Recent Street research has highlighted both optimism and caution among analysts regarding Take-Two Interactive Software's outlook. Several trends and factors are shaping current sentiment around the company's valuation and future growth trajectory.
Bullish Takeaways
- Bullish analysts point to strengthened engagement in the NBA 2K franchise and steady momentum in mobile gaming as key drivers of near-term upside and a higher long-term floor for the business.
- Record engagement levels for NBA 2K, as indicated by increases in player hours and top-played game statistics, support confidence in the company’s ability to monetize live service and annualized titles.
- Forthcoming high-profile releases, including the anticipated next installment in the Grand Theft Auto series, are viewed as favorable catalysts for meaningful earnings growth over the next two to three years.
- Recent performance has exceeded expectations, prompting raised fiscal outlooks and incremental price target increases as analysts anticipate continued strong consumer demand for quality content.
Bearish Takeaways
- Some analysts view the current fiscal year as a transitional period, with limited visibility into significant updates for flagship titles in the near term. This creates potential uncertainty around growth pacing.
- Take-Two remains the last large independent AAA publisher. This increases its scarcity value but also draws attention as a potential M&A target, which introduces both opportunities and risks for future valuation multiples.
- The rising cost of content development and intensifying competition from better-capitalized rivals could pressure margins and execution as the industry landscape evolves.
What's in the News
- Cloud Chamber, the developer behind "BioShock 4," is undergoing layoffs and a change in studio leadership. Former "Diablo" boss Rod Fergusson will be stepping in as head. (Bloomberg)
- Take-Two is revamping the next "BioShock" title after internal reviews flagged the game's story as needing significant improvement. This has prompted a management reshuffle. (Bloomberg)
- A new leak suggests that the highly anticipated "Grand Theft Auto 6" could be delayed from its current release date to September 2026. (Tom's Guide)
- Raymond James has raised its price target for Take-Two to $260, citing strong Q1 results, an upgraded financial outlook, and encouraging progress on upcoming titles like Mafia: The Old Country and Borderlands 4. (Raymond James)
Valuation Changes
- The Fair Value Estimate has increased slightly from $266.16 to $270.34 per share.
- The Discount Rate has inched up marginally from 9.02% to 9.05%.
- The Revenue Growth forecast has declined moderately from 14.80% to 14.31%.
- The Net Profit Margin projection has risen from 12.41% to 12.54%.
- The Future P/E Ratio has moved up from 67.46x to 68.74x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.