On Tuesday, BMO Capital maintained its Outperform rating and $185.00 price target on shares of Take-Two (NASDAQ:TTWO) Interactive (NASDAQ: TTWO). The firm's assessment follows recent evaluations of third-party data from Sensor Tower, which indicated a significant quarter-over-quarter growth in daily active users (DAUs) for the company's core mobile games, particularly highlighting a 75% increase for the newly successful title "Match Factory!"
The firm's stance is also buoyed by the anticipation of the "Grand Theft Auto VI" (GTA VI) release, slated for Fall 2025. BMO Capital views any short-term decline in Take-Two's stock as a chance for investors to capitalize on what is expected to be the most significant video game launch of the decade.
Despite the market's movements, BMO Capital's net bookings estimates for Take-Two Interactive remain steady at $1,250 million for the first fiscal quarter of 2025 and $5,649 million for the full fiscal year 2025. These projections align with a 1.4% increase for the first quarter and are consistent with consensus for the annual figure.
Major video game publishers like Electronic Arts (NASDAQ:EA) and Take-Two Interactive face a strike by voice actors and motion-capture artists represented by the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA).
The strike, which began during the San Diego Comic-Con, is a response to unresolved issues regarding the use of artificial intelligence (AI) in video game production and pay concerns. Despite the ongoing labor dispute, industry analysts, including those at Wedbush Securities, expect minimal impact on the publishers due to the long development cycles of major games and the presence of in-house studios.
They suggest that even highly anticipated games like Take-Two Interactive Software's "Grand Theft Auto VI," slated for release in fall 2025, are unlikely to be affected. However, the strike is anticipated to be a focal point during the upcoming earnings releases of the affected companies.
Analysts warn of more significant consequences if the strike continues unresolved into early September, potentially affecting the year-end holiday season, which is critical for publishers.
InvestingPro Insights
Take-Two Interactive's (NASDAQ:TTWO) recent performance has garnered attention, with BMO Capital maintaining an optimistic outlook. Complementing this perspective, InvestingPro data reveals that Take-Two operates with a moderate level of debt and analysts predict the company will be profitable this year, which could be a sign of financial resilience and potential for future growth. The company's market cap stands at $26.42 billion, and despite a negative P/E ratio for the last twelve months, the PEG ratio indicates potential for future earnings growth.
It's worth noting that Take-Two has had a high return over the last decade, a factor that could interest long-term investors. Additionally, while the company does not pay dividends, its significant quarter-over-quarter growth in daily active users for core mobile games suggests a strong user engagement that could translate into higher revenue streams, especially with the highly anticipated launch of "Grand Theft Auto VI".
Investors looking to delve deeper into Take-Two Interactive's financials and future prospects can find more InvestingPro Tips, including analysis on the company's valuation multiples and profitability forecasts. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to an additional 7 tips that could further inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.