Ahead of Grand Theft Auto VI, is TTWO stock a buy?

Roth Capital Markets analyst Eric Handler reiterated a “Buy” rating and US$295.00 12-month price target on Take-Two Interactive (Take-Two Interactive Stock Quote, Chart, News, Analysts, Financials NASDAQ:TTWO) following what he described as a decisive third-quarter beat and a larger-than-expected increase to full-year guidance.

In a Feb. 4 sales analysis, Handler said the strength of the quarter further lifts the company’s core earnings base, with upside once again driven by evergreen franchises led by NBA 2K and mobile titles.

In a Feb. 4 sales analysis, Handler said the quarter further lifts the company’s core earnings base, with upside again driven by evergreen franchises led by NBA 2K and mobile.

“The combination of a sizable 3Q outperformance and larger full-year guidance bump increases our confidence in Take-Two and its growth potential over the next few years,” he said, adding that “as has been the case over the last few quarters, upside came from the core, evergreen franchises led by NBA 2K and mobile.”

Take-Two reported third-quarter fiscal 2026 bookings of US$1.76-billion, up 28% year over year, and EPS of US$1.23, up 70%, well ahead of Roth and consensus expectations. Handler said the beat was largely driven by recurrent consumer spending growth of 23%, far above his prior forecast. Console and PC recurrent spending rose 26%, supported by 30% growth from NBA 2K following gains of 45% and 48% in the prior two quarters. Mobile recurrent spending increased 21%, with Toon Blast, Match Factory and Color Block Jam all exceeding expectations.

Operating margin expanded to 16.7%, up 440 basis points year over year and well ahead of Handler’s estimate, reflecting strong bookings growth and operating expense leverage, partially offset by lower gross margin.

Following the quarter, Handler raised his fiscal 2026 outlook toward the high end of guidance, forecasting bookings of US$6.69-billion and EPS of US$3.84. He now expects full-year recurrent consumer spending to rise 17%, with console and PC up 23% and mobile up 13%, characterizing fourth-quarter mobile assumptions as conservative given easier comparisons and building momentum. He also reduced his outlook for selling and marketing expense growth, noting that some planned spend has shifted into fiscal 2027, supporting further margin expansion.

Handler said confidence continues to build around the timing of Grand Theft Auto VI, with marketing expected to ramp meaningfully this summer ahead of a targeted Nov. 19 launch. While the title may require limited promotion given unprecedented anticipation, he said additional marketing should further amplify momentum heading into what is widely expected to be the industry’s most significant release.

On artificial intelligence, Handler said management views generative AI as an enabler rather than a threat.

“Take-Two views AI as a natural evolution of game development rather than a disruptive threat,” he said, noting management believes AI can improve efficiency while allowing developers to focus on creative elements that remain fundamentally human-driven. CEO Strauss Zelnick has emphasized that storytelling, emotional connection and overall game design cannot be replicated by AI.

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