![]() Self-developed franchises such as Grand Theft Auto and Red Dead Redemption have sold 400 million and 70 million copies, respectively, while garnering acclaim. consensus revenue estimates over the longer-term. Take-Two has some of the strongest franchises in the gaming industry, namely Grand Theft Auto, Red Dead Redemption, Borderlands and NBA 2K, which could drive upside vs. Strong Franchises Could Drive Continued Growth ![]() Grand Theft Auto V sold 32.5 million copies during the first year of launch, so I estimate that the next title in the franchise could possibly sell more than 40 million copies within the first year of launch. The Grand Theft Auto franchise has sold more than 400 million units, with the most recent release, Grand Theft Auto V, selling 180 million+ units. With a target of 8 billion net bookings by 2025 and 36 titles in the pipeline for fiscal 2025 through 2026, Take-Two may release the next installment of Grand Theft Auto during this period, which could push revenue in fiscal 20 above consensus expectations. Investors are now primarily focused on the upcoming year, and it would take significant worsening of trends for the FY24 results to heavily impact the stock.įurthermore, I anticipate that Take-Two could make product announcements later this year regarding its future release lineup, potentially serving as positive catalysts for the stock. I believe Take-Two's annual guidance has set a relatively low bar for FY24, reducing execution risks to some extent. Despite modest expectations for this year, I believe the risk/reward profile for Take-Two's stock has improved. I believe these figures indicate the launch year of GTA 6 and other significant titles, as Take-Two only expects three core immersive titles in FY24 compared to 14 in FY25-26. Take-Two provided preliminary guidance for the fiscal year 2025, anticipating bookings of over $8 billion (which is $2.5 billion higher than the midpoint of the FY24 guidance) and adjusted operating cash flow surpassing $1 billion. Take-Two Interactive announced its Q4 2023 results, revealing that bookings exceeded expectations by 4%, EPS fell short by 13%. F4Q23 Review: Long-Term Opportunity Remains Attractive My end-of-year price target of $157 is based on a 2025 20x forward PE. TTWO is currently trading at a 18x forward 2025 earnings, and I believe TTWO possesses the highest caliber franchises compared to its industry peers, warranting a valuation premium. The recent acquisition of Zynga contributes to Take-Two's growth by increasing recurrent revenue and expanding its presence in the mobile gaming market. ( NASDAQ: TTWO) has made substantial investments in its PC and console division and is now poised to significantly increase its production of AAA games.
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