Take-Two Stock Gets an Upgrade. There’s More Than Just Grand Theft Auto.

“Following a relatively slower period in front-line releases, we see a number of reasons to become incrementally more optimistic in the company’s near- and medium-term path forward,” Marok writes.

Take-Two stock is up 1.1% to $146.89 in Wednesday trading. Shares have rallied 41% this year as investors increasingly bet that the sequel to Grand Theft Auto V is rounding the corner. That game still drives millions in sales for Take-Two, and has been dubbed the most financially successful media title of all time.

The company said in May that it expects net bookings of $8 billion in fiscal 2025, compared to its forecast for $5.45 billion to $5.55 billion in fiscal 2024. That step up had Wall Street salivating about a potential 2024 release of Grand Theft Auto VI. Marok believes the outlook foreshadows the game, and expects to hear a more official announcement, such as a trailer, soon.

Marok, citing his analysis of game-console-sales trends, thinks Grand Theft Auto VI can sell 35 million copies in its first year. He thinks it’s more likely that figure proves conservative than overly optimistic.

But it isn’t just Grand Theft Auto, or its publishing label Rockstar Games, that’s driving the upgrade. Marok believes existing franchises, new intellectual properties, and business models, and a stabilization of the mobile games market will drive growth.

“With the number of projects in development, we think that the path has been laid out for more consistent performance and a level of stability in release velocity that has not been previously seen,” Marok writes. “Importantly, our optimistic view does not require a perfect hit rate for TTWO—there is enough room to maneuver.”

He thinks Take-Two could be a potential acquisition target after
Microsoft
‘s (MSFT) acquisition of
Activision Blizzard
(ATVI) closes.

Write to Connor Smith at [email protected]