On Monday, Jefferies resumed coverage on shares of Take-Two (NASDAQ:TTWO) Interactive (NASDAQ:TTWO), assigning a Buy rating and setting a price target of $195.00.
The firm's evaluation comes after a meeting with Take-Two CEO Strauss Zelnick the previous week, where discussions included the anticipated release of Grand Theft Auto VI (GTA VI) in 2025. The guidance issued in May is expected to confirm whether the launch will be in March or during the holiday season of the same year.
The analyst noted that Take-Two Interactive is planning to reduce its corporate headcount but anticipates a smaller reduction in force (RIF) compared to other companies. This move is part of the cost management strategies the company is taking. Additionally, the use of artificial intelligence (AI) in launching games was highlighted as a factor that is expected to enhance the quality of games over time.
"We also believe the Gearbox deal brings a key franchise under full TTWO control at an attractive price," said the analysts."
InvestingPro Insights
Jefferies' positive stance on Take-Two Interactive (NASDAQ:TTWO) is reflected in the market data and analyst predictions. With a market capitalization of $25.33 billion, Take-Two's financial health and future prospects are of keen interest to investors. Notably, analysts expect the company to return to profitability this year, which is a significant turnaround from the loss reported over the last twelve months. This anticipated shift is underscored by the company's high return over the past decade, hinting at its capability to leverage its strong franchises and industry position.
InvestingPro Tips reveal that Take-Two operates with a moderate level of debt and does not pay a dividend, which may appeal to growth-focused investors. The company's revenue growth of 11.64% in the last twelve months as of Q3 2024, despite a recent quarterly dip, suggests resilience in its business model. Moreover, Take-Two's commitment to innovation, as seen through its AI initiatives and strategic acquisitions like Gearbox, could enhance its already robust gross profit margin of 52.07%.
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