On Thursday, BMO Capital Markets maintained its Outperform rating on shares of Take-Two Interactive (NASDAQ:TTWO), while significantly raising the price target to $240 from the previous $190. The stock, currently trading at $190.42 with a market capitalization of $33.4 billion, appears to be trading above its InvestingPro Fair Value.
According to InvestingPro analysis, the stock has shown strong momentum with a 20% return over the past year. The investment firm's analysis forecasts robust sales for the upcoming Grand Theft Auto VI (GTA VI), projecting 45 million units sold in its initial Fall 2025 release window.
This sales figure represents an estimated 35% market penetration among PlayStation 5 and Xbox Series X|S console owners, which currently number around 130 million. The company's revenue growth has been steady, with a 5-year CAGR of 15% and current annual revenue of $5.46 billion.
The analyst from BMO Capital Markets noted that despite GTA VI launching into a smaller install base compared to its predecessor, GTA V, interest in the franchise has substantially grown over the last decade.
The firm anticipates that the game's release will act as a significant catalyst for console sales during the Holiday 2025 season. Moreover, BMO Capital expressed enthusiasm about new monetization strategies that could be implemented for GTA VI.
Management at Take-Two Interactive has hinted at new growth opportunities that could enhance the company's business model and financial outlook. While details remain unspecified, BMO Capital's report suggests that GTA VI could introduce new revenue streams.
Notably, the current generation of GTA V is already being utilized by autonomous vehicle (AV) companies to train self-driving cars. BMO Capital believes that a robust 10-year update plan for GTA VI could potentially generate AI-based licensing revenue, aiding further AV model training—a prospect not yet factored into their financial model.
The firm's revised estimates, which are predicated on the projected sales of GTA VI, have led to the new price target of $240. BMO Capital reaffirms its Outperform rating and positions Take-Two Interactive as a Top Pick in the sector.
With analyst targets ranging from $155 to $211 and a strong consensus recommendation of 1.6, investors seeking deeper insights can access the comprehensive Pro Research Report and 14 additional key metrics through InvestingPro's detailed analysis platform.
In other recent news, Take-Two Interactive has been a focal point in the financial sector due to its fiscal second-quarter earnings for the year 2025 and growth projections. TD Cowen recently expressed confidence in the company, raising the stock's price target from $176 to $211, maintaining a positive outlook on the company's performance.
The firm cited the potential of the online mode of the upcoming Grand Theft Auto VI (GTA VI) and the strong pipeline of titles, including Borderlands 4, as key contributors to the company's future success.
Roth/MKM analysts also raised the company's stock target by $26, reflecting expectations of a significant increase in bookings and earnings per share starting in 2025. The improved cash flow is anticipated to enable debt reduction and position Take-Two for potential mergers and acquisitions. The company is also planning to launch several major titles in 2025, including Civilization VII, Borderlands 4, and Mafia: The Old Country.
The recent earnings call, led by CEO Strauss Zelnick, indicated plans and expectations for the company's future operations. While no specific financial misses or shortfalls were detailed, the discussion suggested a positive outlook. These developments highlight the recent activities and projections for Take-Two Interactive.
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