Investors in Take-Two Interactive NASDAQ:TTWO stock saw some big gains in November, with shares jumping from $135 to hit $163 on 14 December. It was a big rally, but the stock is still off its YTD by some margin, although there also looks to be scope for shares to get back to $200 this year.
On top of that, the company was added to the NASDAQ 100 index in mid-December. Earnings guidance for Q3 ending 31 December saw Take-Two report anticipated net revenue of $1.29bn to $1.34bn. This equates to a net loss of at least $107m, but this does not seem to be fazing the market.
We also note that Take-Two issued some short term senior notes last week, adding $50m of 5% due in 2026 and $300m at 4.95% due 2028. Among the purposes for the issue is restructuring the existing balance sheet, including retirement of 3.3% senior notes due this month.
Take-Two Interactive: owners of Grand Theft Auto
Take-Two Interactive develops, publishes, and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games, 2K, Private Division, and Zynga names. It develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, LA Noire, and Red Dead Redemption names.
Investors in Take-Two are razor-focused on its Grand Theft Auto franchise, developed by Rockstar Games. GTA 5 has been a cash cow for the company – when it was released in 2013, it generated over $1 billion in revenue in only three days. Overall, it has made almost $8bn since it hit consoles. The GTA franchise has demonstrated how video game releases can far outstrip Hollywood blockbusters in terms of cash earned.
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Positive technical analysis on Take-Two Interactive
Take-Two Interactive Software’s stock is now priced above its 50-day and 200-day moving averages, but below its 5-day moving average, while its MACD (Moving Average Convergence Divergence) indicates that the stock’s price movement momentum is strengthening. Historically, this is a positive setup in the medium and long-term.
Many institutional investors keep close watch on the 200-day moving average. Take-Two Interactive stock is trading near it’s 12-month high, which signals some short term resistance in January.
Rockstar Games, which is already touting trailers for GTA 6, has confirmed the release date is sometime in 2026, so Take-Two will not be receiving that particular cash boost this year. Gaming pundits reckon it will see the light of day in the second half of 2025.
High quality peers among video game developers
Take-Two Interactive is trading in among a cluster of high quality names within the video gaming space, meaning investors are spoiled for choice. Electronic Arts emerges as one likely alternative. Financially speaking, Take-Two does look in better shape than Roblox NYSE:RBLX, for example. It is tough to make a call between Take-Two and EA though.
Electronic Arts emerges as Take-Two’s closest peer, and EA has also been seeing some positive share price action, with stock up from $117 to hit $136 at time of writing. Both stocks saw a little bit of a slump over the Christmas period, and the market now seems to be in wait and see mode. Christmas sales will be an area of special interest for fund managers.
Investors are seeing some good metrics supporting the share price of Take-Two Interactive: its last set of numbers were favourably received. The company has reported solid asset growth and positive movement on its price to book ratio. Revenue efficiency and EBITDA are also looking good.
Take-Two is currently demonstrating an ability to get itself back on track, following last winter’s slump in video game sales. Much will rest on its next set of numbers, and Christmas sales in the global video games sector will likely be a factor for both analysts in Wall Street and the wider investor community.
