Take-Two Interactive Software (NASDAQ: TTWO) has recently seen a positive turn in its fortunes, with a significant 60% increase in its stock price in 2022. While the growth prospects remain promising, the company’s Q4 results and guidance for 2025 have caused a reset in the market sentiment.
One of the key factors impacting investor expectations is the delay in the release of Grand Theft Auto VI, the flagship product of Take-Two, now scheduled for early F2026. This delay has had a notable impact on the outlook for the current year, leading to concerns among investors.
Despite these challenges, Take-Two remains in a strong position with a robust lineup of new releases planned for the upcoming year. While investors had hoped for a faster rebound in the current year, the reality is different, potentially prolonging the correction phase that began in February following the Q3 release.
For investors, this presents a second opportunity to participate in the rally that began two years ago and is expected to continue for years to come.
Take-Two Reports Solid Q4 Performance but Guides Weak for 2025
In the fourth quarter, Take-Two delivered a decent performance, with strong showings on key platforms that helped sustain the business despite facing tough year-over-year comparisons. The company reported net revenue of $1.4 billion, a slight decrease of 3.4% but surpassing market expectations, driven by successful titles such as NBA 2K24, Zynga, and Grand Theft Auto.
Notably, the PC and Other Platforms segment experienced a decline of 20% and 25% in bookings, while Mobile emerged as the strongest performer with a marginal decline of -0.4% and a 0.3% increase in net bookings. Console sales dipped by 2.5%, with bookings down by 1.4%.
However, the weak link in the chain was the decline in bookings, which serve as an indicator of future revenue growth. Overall bookings fell by 3%, with a 2% drop in bookings from recurring customers, constituting 79% of the net total. The guidance for F2025 also reflects this booking weakness, primarily due to the delayed launch of GTQ6.
Analysts Adjust Targets as Market Adopts Wait-and-See Approach
Following the Q4 results, analysts have responded positively, although there have been adjustments to their targets. While the consensus rating of Moderate Buy remains unchanged, analysts have tempered their price targets, signaling a shift to a wait-and-see mode.
Several prominent analysts, including Roth MKM, Jeffries, and Goldman Sachs, have revised their price targets to the range of $175 to $180 to align with broader market expectations. Despite these adjustments, the company’s earnings outlook remains positive, with the potential for bookings to pick up in Q1 F2026.
Overall, Take-Two Interactive Software continues to navigate through challenges and opportunities in the gaming industry, offering investors a second chance to capitalize on its long-term growth potential.
