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On Monday, Citi reaffirmed its confidence in Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO), maintaining a Buy rating and a $200.00 price target for the video game company's shares. The endorsement follows Take-Two's recent financial report, which showed bookings and non-GAAP EPS figures that were consistent with market expectations. The company provided guidance for the second fiscal quarter of 2025 (F2Q25), projecting bookings to be between $1.42 billion and $1.47 billion, and non-GAAP EPS to range from $0.35 to $0.45.
Looking further ahead, Take-Two Interactive anticipates fiscal year 2025 (FY 2025) bookings to fall between $5.50 billion and $5.65 billion, with non-GAAP EPS projections ranging from $2.35 to $2.60. Citi has updated its model for Take-Two to reflect the company's performance to date and the anticipated pipeline of upcoming game releases.
The analyst from Citi noted that their updated model aligns with the company's management commentary. One significant update in their projections includes the expected release of the highly anticipated game "Civilization VII," which is now slated to launch in the fourth fiscal quarter of 2025 (F4Q25).
Take-Two Interactive is known for its strong portfolio of gaming titles, and the release of "Civilization VII" is expected to be a major event for the company. With the firm's guidance and the updated projections from Citi, investors have clear expectations for the company's performance in the upcoming fiscal periods.
In other recent news, Take-Two Interactive has been garnering attention with significant developments. The company's core mobile games have shown quarter-over-quarter growth in daily active users, with a notable 75% increase for the title "Match Factory!" according to third-party data from Sensor Tower. These findings contributed to BMO Capital maintaining its Outperform rating on Take-Two shares. Additionally, the firm's net bookings estimates for Take-Two remain steady at $1,250 million for the first fiscal quarter of 2025 and $5,649 million for the full fiscal year 2025.
Meanwhile, the company is also dealing with a strike by voice actors and motion-capture artists represented by the Screen Actors Guild‐American Federation of Television and Radio Artists (SAG-AFTRA).
The strike, which began during the San Diego Comic-Con, is a response to unresolved issues regarding the use of artificial intelligence in video game production and pay concerns. Despite this, industry analysts, including those at Wedbush Securities, expect minimal impact on Take-Two due to the long development cycles of major games and the presence of in-house studios.
On a more positive note, the highly anticipated "Grand Theft Auto VI" (GTA VI) release is slated for Fall 2025. BMO Capital sees any short-term decline in Take-Two's stock as an opportunity for investors, as it is expected to be a significant video game launch.
InvestingPro Insights
As Take-Two Interactive (NASDAQ:TTWO) continues to navigate the dynamic gaming industry, recent data from InvestingPro offers a nuanced view of the company's financial health and market position. The company's market capitalization stands at a robust $26.23 billion, reflecting significant investor interest and a substantial presence in the sector. However, it's worth noting that Take-Two's P/E ratio is currently negative at -6.73, indicating that the company has reported a loss over the last twelve months as of Q1 2023. This is further emphasized by an adjusted P/E ratio of -24.56, suggesting that investors are anticipating future earnings growth to justify the current share price.
Despite a slight revenue decline of -2.33% over the last twelve months as of Q1 2023, the company has shown a quarterly revenue growth of 4.16% in Q1 2023. This suggests a potential turnaround or seasonal strength in the company's business. Additionally, with a gross profit margin of 55.58%, Take-Two maintains a strong ability to convert revenue into profit, which is essential for long-term sustainability.
InvestingPro Tips highlight several factors that investors should consider. Take-Two is trading at a high EBITDA valuation multiple and a high revenue valuation multiple, which could imply that the stock is priced optimistically relative to its earnings before interest, taxes, depreciation, and amortization, as well as its revenue. Moreover, with short-term obligations exceeding liquid assets, there may be concerns about the company's liquidity in the immediate future. On the brighter side, analysts predict the company will be profitable this year, and Take-Two has delivered a high return over the last decade, showcasing its potential for delivering shareholder value over time. For those interested in a deeper analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/TTWO
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