Valued at a market cap of $27.2 billion, Take-Two Interactive Software, Inc. (TTWO) develops and markets video games, including the famous Grand Theft Auto series. The New York-based company earns revenues from the sale of disk-based video game products, downloadable content, subscriptions, micro-transactions, and advertising.
Shares of this video game maker have underperformed the broader market over the past 52 weeks. TTWO has gained 10.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied almost 27%. In 2024, shares of TTWO declined marginally, compared to SPX’s 16.8% gain on a YTD basis.
Zooming in further, TTWO has also lagged behind the Roundhill Esports & Digital Entertainment ETF’s (NERD) 17.4% gain over the past 52 weeks and 8.3% return on a YTD basis.
Shares of TTWO have underperformed primarily due to dullness in recurrent consumer spending growth combined with continued softness in mobile advertising and increasing operating expenses. However, despite missing Wall Street’s Q1 revenue estimates on Aug. 8, the company’s stock price rose 4.4% the following day, primarily driven by stronger-than-expected earnings and positive investor sentiment surrounding the upcoming release of "Grand Theft Auto VI" in 2025. The company's reaffirmation of its growth forecast for fiscal years 2026 and 2027, tied to the anticipated success of this highly awaited game, also contributed to the stock's rise.
For the current fiscal year, ending in March 2025, analysts expect TTWO’s EPS to grow 17.6% year over year to $1.07. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one another occasion.
Among the 23 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 18 “Strong Buy” ratings, two “Moderate Buys,” and three “Holds.”
Overall, the configuration has remained steady over the past months.
On Aug. 21, Benchmark maintained a “Buy” rating on Take-Two Interactive Software and raised the price target to $210, citing an anticipated acceleration in medium-term financial growth in the company fueled by specific catalysts and a resurgence in the mobile segment.
The mean price target of $180.33 represents a premium of 13.6% to TTWO’s current levels. The street-high price target of $200, implies a potential upside of 26% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
