On Friday, BofA Securities revised its outlook on Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO) shares, reducing the price target to $160 from the previous $170 while maintaining a Neutral rating on the stock.
The adjustment comes amid concerns about the release schedule for the highly anticipated video game, Grand Theft Auto VI. The company has recently provided a narrowed release window for the game, now expected in Fall 2025.
Despite this update, BofA Securities remains cautious, suggesting that potential investors may seek further confirmation that the game's development is progressing according to plan.
The firm points to the necessity for more concrete updates from Rockstar Games, the developer behind the Grand Theft Auto series.
BofA Securities notes that Take-Two Interactive has lowered its financial guidance multiple times due to the shifting launch timeline of Grand Theft Auto VI.
The firm raises the question of whether the release could be delayed further into calendar year 2026, considering the current lack of detailed information on the game and specific financial forecasts for fiscal years 2026 and 2027.
The analyst firm acknowledges that some investors might be willing to tolerate the uncertainty surrounding the timing of Take-Two's earnings per share inflection.
However, BofA Securities believes that the current situation does not provide enough momentum to trigger a significant positive shift in the stock's performance.
The firm's stance reflects a cautious approach to the company's stock amid ongoing uncertainties related to one of its key upcoming product launches.
InvestingPro Insights
For investors considering Take-Two Interactive's stock, recent InvestingPro data and tips shed light on the company's financial health and market performance. Take-Two Interactive holds a market capitalization of $24.92 billion, which reflects its substantial presence in the gaming industry. Despite concerns over the release of Grand Theft Auto VI, the company has demonstrated revenue growth of 11.64% in the last twelve months as of Q3 2024, indicating a strong demand for its products.
An InvestingPro Tip highlights that the company's short-term obligations exceed its liquid assets, which may raise questions about its short-term financial resilience. However, with analysts predicting profitability this year, there is potential for an earnings per share inflection that could influence the stock's trajectory. Additionally, it's worth noting that the company operates with a moderate level of debt and has not been profitable over the last twelve months, which may factor into investment decisions. For those looking for more in-depth analysis, there are 6 additional InvestingPro Tips available, which can be accessed with the promo code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
Investors may also find the P/E ratio of -17.08 and the adjusted P/E ratio of -56.75 as of Q3 2024 to be of interest when evaluating the company's valuation in the context of its earnings. The EBITDA growth of 166.75% in the same period suggests operational efficiencies that could be promising for future profitability. With the next earnings date set for May 16, 2024, stakeholders should mark their calendars for updates that may impact the investment landscape for Take-Two Interactive.
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