Should You Buy Take-Two Stock Around $235?

Core Viewpoint - Investors are optimistic about Take-Two Interactive's future, particularly with the upcoming release of Grand Theft Auto VI, which is expected to significantly boost the company's performance [1][3]. Financial Outlook - Take-Two's stock is currently trading at a forward price-to-earnings (P/E) ratio of 87 for the fiscal year ending March 31, 2026, which is projected to drop to 25 for fiscal 2027, reflecting expectations for strong sales from GTA VI and other titles [5]. - Management anticipates net bookings to grow approximately 5% in fiscal 2026, reaching between $5.9 billion and $6.0 billion, with nearly half of these bookings expected from Zynga's mobile titles [7]. - Analysts project a 52% revenue growth for fiscal 2027, estimating it will reach a record $9.1 billion, driven by the sales of GTA VI [8]. Growth Projections - Wall Street analysts forecast that Take-Two's revenue could reach $10.9 billion by fiscal 2030, indicating a compound annual growth rate of 14% over the next five years [10]. - The company has a long-term growth strategy with 25 titles planned for release through fiscal 2028, which includes existing franchises and new mobile titles [11]. Earnings and Consumer Spending - A significant portion of Take-Two's revenue, approximately 75%, comes from recurrent consumer spending, which includes virtual currency and in-game purchases, indicating strong potential for margin growth [12]. - Analysts expect adjusted earnings to grow at an annualized rate of 39% over the next five years, potentially reaching $16.03 per share, which could lead to a share price of $400 if the stock maintains a P/E ratio of 25 [13].