Take-Two Interactive (NASDAQ:TTWO) lowered its Q3 bookings outlook, citing weak consumer spending and an uncertain macro environment. Nonetheless, Goldman Sachs analyst Eric Sheridan reiterated Buy on this video game holding company and expects the momentum in its business to be sustained in the coming quarters. The analysts’ consensus rating on TTWO stock also suggests a Buy.
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Let’s delve deeper.
Factors that Support TTWO Stock
Take-Two Interactive projects that current consumer spending will decrease by approximately 5%, which assumes a modest decline in its mobile business. Thus, the company now expects net bookings to be in the range of $1.3 billion to $1.35 billion in Q3, down from its earlier forecast of $1.4 billion. Moreover, it fell short of analysts’ estimates of $1.44 billion.
Nonetheless, the company will unveil the “Grand Theft Auto VI” trailer in December. It is highly anticipated that the GTA title has the potential to generate substantial revenue and earnings for the company. Echoing similar sentiments, Sheridan expects GTA VI to be released in late Fiscal 2025, which he believes will significantly boost the company’s earnings in Fiscal 2026. While the analyst expects the macro headwinds to hurt the gaming industry, TTWO’s multi-year content pipeline will likely drive its financials and support its share price.
Along with Sheridan, TD Cowen analyst Doug Creutz sees that the trailer release of GTA VI will remove the uncertainty related to the timing of its launch and would benefit TTWO shares.
What is the Stock Price Prediction for Take-Two?
Wall Street analysts are bullish about Take-Two Interactive stock. With 10 Buy and two Hold recommendations, TTWO stock has a Strong Buy consensus rating. Moreover, the average TTWO stock price target of $160.08 implies 11.58% upside potential from current levels.
Bottom Line
Take-Two Interactive is poised to deliver multi-year growth, led by its robust development pipeline and groundbreaking titles. Moreover, the ongoing strength of NBA 2K, GTA Online, and GTA V titles will enable it to deliver strong financials. The company reiterated its full-year booking outlook despite lowering the Q3 projection. This indicates that Q4 could witness a solid sequential improvement. This is reflected in analysts’ Strong Buy consensus rating.
