Take-Two Interactive is a buy, Roth says

Roth Capital Partners reiterated its “Buy” rating and $265 price target on Take-Two Interactive (Take-Two Interactive Software Stock Quote, Chart, News, Analysts, Financials NASDAQ:TTWO), saying recent meetings with management reinforced confidence that the company is on track for strong long-term growth.

“Management is emphasizing it is in growth mode with its development pipeline now in a harvesting phase and mobile back on a positive trajectory,” Roth analyst Eric Handler said in a June 16 note. “In addition, with next year’s release of GTA VI and an expectation for the game having a long tail, a new baseline number for bookings should occur.”

Take-Two Interactive Software makes and sells video games for consoles, handheld devices, computers, and mobile platforms. Its games are available through stores, digital downloads, online platforms, and cloud streaming.

Handler said Take-Two has reached a key turning point with its development pipeline. This year includes major releases like -billionMafia: The Old Country-billion (Aug. 8) and -billionBorderlands 4-billion (Sept. 12), but fiscal 2027 is expected to be transformative with the launch of -billionGTA VI-billion, setting the stage for several years of higher bookings and cash flow.

“The game appears far larger than any other GTA game, is visually stunning, and anticipation among consumers is the highest we have ever seen for a video game release,” he said. “The tail for unit sales should prove long, and while not yet announced, we would expect to see a new GTA Online component and a PC SKU anywhere from 9-18 months after the console game release. The development pipeline still remains plentiful with likely FY28-FY30 releases such as Judas, Bioshock, and Project Ethos.”

Take-Two recently raised $1.2-billion through a secondary equity offering of about 5.46 million shares at $225 each. Of that, $550-million is expected to go toward repaying debt due in April 2026. The rest, combined with the company’s $1.5-billion cash balance, gives it flexibility for acquisitions or to address another $600-million in debt maturing in April 2027.

“In our view, although there may be a good number of video game assets for sale, especially within mobile, there are few transactions with established IP at scale, “Handler said. “One potential deal that we find interesting would be Warner Bros. Interactive, given its ownership of the Mortal Kombat franchise.”

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