On Monday, Baird adjusted the price target for Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO), a leading game publisher, reducing it slightly to $172 from $173 while maintaining an Outperform rating on the stock.
The modification follows the company's announcement regarding the delay of its highly anticipated title, GTA VI, which is now scheduled for release in Fiscal Year 2026 (Calendar Year 2025), a shift from the previously expected Fiscal Year 2025.
The analyst from Baird expressed belief that the delay of GTA VI had been largely expected by the investment community. This sentiment is supported by management's comments, which suggest a high degree of confidence in the new launch timeline. Despite the postponement, the analyst sees positive aspects in Take-Two's outlook, highlighting an anticipated return to bookings growth in Fiscal Year 2025.
The company's focus on maintaining stable or improved operating margins was also noted as a positive factor. This is expected to be achieved through ongoing efforts to streamline overhead costs. Furthermore, the report points to a rise in mobile bookings as a favorable trend, acknowledging that this is partly due to increased marketing expenditures.
InvestingPro Insights
As investors digest the news of GTA VI's delay and Baird's price target adjustment for Take-Two Interactive (NASDAQ:TTWO), real-time data from InvestingPro provides a clearer picture of the company's financial status and stock behavior. The market capitalization stands at a robust $25.25 billion, reflecting the scale of the company within the gaming industry. Despite the lack of profitability over the last twelve months, with a P/E ratio of -6.72, analysts are predicting a return to profitability this year. This aligns with Baird's positive outlook on the company's future bookings growth.
InvestingPro Tips highlight that Take-Two Interactive generally trades with low price volatility, which may offer some reassurance to investors concerned about market fluctuations. Additionally, the company operates with a moderate level of debt, which is a positive sign for financial stability. While the stock is trading at a high EBITDA valuation multiple, suggesting it may be priced optimistically relative to its earnings before interest, taxes, depreciation, and amortization, the company has seen a high return over the last decade, indicating a strong historical performance.
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