Take-Two stock price target raised to $292 by UBS on strong results

Investing.com - UBS raised its price target on Take-Two Interactive (NASDAQ:TTWO) to $292.00 from $285.00 while maintaining a Buy rating following the company’s better-than-expected fiscal second quarter results. The stock currently trades at $252.40, just 4.7% below UBS’s target and near its 52-week high of $264.79, after delivering an impressive 40.9% return over the past year. InvestingPro analysis indicates the stock appears overvalued based on its Fair Value assessment.

Take-Two reported strong quarterly performance that exceeded expectations, prompting management to raise its guidance despite announcing a delay in the release of Grand Theft Auto VI to November 2026, approximately six months later than previously planned.

UBS analyst Christopher Schoell noted that while the GTA VI delay could initially pressure the stock, any pullback should represent a buying opportunity for investors. Management now forecasts approximately 14% bookings growth and 26% adjusted EPS growth at the midpoint for fiscal 2026, significantly higher than previous projections of about 8% for both metrics. This outlook aligns with Take-Two’s recent revenue growth of 14% over the last twelve months, though investors should note the stock trades at a high EV/EBITDA multiple of 62.4.

The revised outlook is supported by improved performance across Take-Two’s portfolio, including better recurrent consumer spending (up 11% versus 4% previously projected), mid-20s growth for NBA titles (up from mid-teens), and approximately 10% mobile growth (up from low single digits).

Despite lowering fiscal 2027 estimates due to the GTA VI delay, UBS increased its outer-year projections by low to mid-single digit percentages, primarily due to stronger recurrent consumer spending assumptions for the remaining portfolio, with adjusted EPS expected to scale from approximately $3.30 in fiscal 2025 to over $10 by fiscal 2028. While currently not profitable (with -$22.26 diluted EPS for the last twelve months), analysts predict Take-Two will be profitable this fiscal year with EPS forecast at $2.85. The company operates with moderate debt levels and maintains a healthy current ratio of 1.15, indicating solid short-term financial stability. For deeper insights into Take-Two’s financial health and valuation metrics, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Take-Two Interactive Software Inc. announced its second-quarter fiscal 2026 earnings, which fell short of analyst expectations for earnings per share (EPS). The company reported an EPS of -$0.73, significantly missing the anticipated $0.94, resulting in a surprise of -177.66%. However, Take-Two exceeded revenue forecasts, bringing in $1.77 billion compared to the predicted $1.72 billion, marking a 2.91% surprise. These developments reflect the company’s ongoing financial performance challenges and successes. The earnings report has caught the attention of investors and analysts alike. While the EPS miss could raise concerns, the revenue beat might offer some reassurance. Analyst firms may adjust their outlooks based on these results, but specific upgrades or downgrades were not mentioned in the recent news.

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