Take-Two Interactive Software, known for its popular franchises like Grand Theft Auto and NBA 2K, is set to release Grand Theft Auto VI on November 19, after a 13-year wait since the last installment.
Analysts believe that the anticipated demand for the game is being underestimated, with management forecasting sales of 30 million copies in the first year, while some estimates suggest it could reach 37 million or more. The company generated approximately $6.7 billion in revenue for fiscal 2026, with expectations to rise to about $8.5 billion in fiscal 2027, marking a 27% increase.
Earnings per share are projected to jump nearly 50% from $6.97 in fiscal 2027 to $10.32 in fiscal 2028, driven by the game's sales. Despite this potential, Take-Two's shares are trading at around 21 times projected fiscal 2028 adjusted earnings, indicating they are undervalued.
With shares currently priced at approximately $212, a two-year price target of $293 suggests a potential upside of 35%-40%. However, the main risk lies in the possibility that the game may not meet expectations, which could negatively impact the company's earnings and stock price.
Paul Meeks, Managing Director and Head of Technology Research at Freedom Capital Markets, highlights this as a unique investment opportunity ahead of a major video game launch