Take-Two's Pre-GTA VI Momentum: Why Bulls Remain Unshaken Amid High Valuations

Take-Two Interactive (NASDAQ: TTWO) trades near its 52-week high of $238, yet bulls are doubling down on the stock despite its $40.8 billion market cap and a 129x EV/EBITDA multiple. The secret? A trio of near-term catalysts—NBA 2K’s record engagement, a conservative FY2026 guidance offering safety, and a pipeline dense with hits like Mafia: The Old Country—creates a “GTA VI-free” growth floor. Meanwhile, the delayed but anticipated launch of Grand Theft Auto VI (GTA VI) in May 2026 acts as a $270-strike call option, with its 475 million trailer views proving fan fervor is unshaken. Here’s why investors should lean into this premium now.

NBA 2K’s Recurring Revenue Machine: The “GTA VI-Free” Growth Floor

Take-Two’s Q4 FY2025 results underscore why bulls sleep soundly even without GTA VI: the NBA 2K franchise is thriving independently. Recurrent consumer spending (subscriptions, in-game purchases) rose 14% to 77% of total net bookings, with NBA 2K25/2K24 driving $1.58 billion in quarterly revenue. For fiscal 2025, NBA 2K’s recurrent spending grew 7%, contributing 80% of annual net bookings.

This resilience isn’t luck. NBA 2K’s live-service model—think MyTEAM card sales, premium content drops, and cross-platform play—ensures steady cash flows. Even with mobile gaming’s rising acquisition costs, Take-Two’s mobile segment grew 37% in Q4, proving its ability to monetize across platforms.

FY2026 Guidance: Conservative by Design, Aggressive by Analysts

Take-Two’s fiscal 2026 guidance of $5.9–$6.0 billion in net bookings is intentionally cautious, likely to exceed expectations. Why? The $5.95 billion midpoint already factors in no contribution from GTA VI (set for FY2027). Meanwhile, analysts like DA Davidson and Jefferies see bookings hitting $6.2–$6.5 billion, citing upside from Mafia: The Old Country (August 2025) and Borderlands 4 (September 2025).

This gap creates a sweet spot for investors: even if GTA VI underwhelms, titles like Civilization VII VR and WWE 2K26 provide a safety net. The asymmetric upside comes from GTA VI itself: analysts project its launch could boost EPS to over $10.00 annually for three years, with Jefferies forecasting $8.75 billion in FY2027 bookings.

The GTA VI Call Option: 475M Views ≠ Overvaluation, but Anticipation

GTA VI’s delay to May 2026 is a strategic masterstroke. The game’s second trailer amassing 475 million views in 24 hours proves its cultural staying power. BMO Capital and DA Davidson’s $270 price targets (vs. current $238) assume GTA VI’s impact will validate the premium.

Critics cite the stock’s valuation, but this ignores structural tailwinds:
1. Live services dominance: Recurrent spending now fuels 75–80% of revenue, reducing reliance on one-off game sales.
2. Mobile moats: Titles like Toon Blast and Empires & Puzzles deliver 46% of quarterly net bookings, with margins improving as scale grows.
3. IP longevity: GTA, Red Dead, and NBA 2K franchises have decades-long fanbases, ensuring recurring demand.

Why Buy Now? The Math of a Call Option

Take-Two’s stock is priced as a call option on GTA VI’s success, with its $270 analyst targets implying 17% upside from current levels. The “GTA VI-free” growth floor ensures downside protection: even if the game flops, FY2026’s $5.9B bookings and $508–$562M EBITDA provide stability.

The risks? Near-term headwinds like Turkish Lira volatility and Civilization 7’s modest performance* are already priced in. Bulls argue these are speed bumps, not roadblocks.

Final Call: Own the Franchise, Not the Hype

Take-Two’s valuation isn’t cheap, but it’s strategically justified. The NBA 2K engine, diversified pipeline, and GTA VI’s “call option” create a rare blend of safety and asymmetric upside. With $1.46 billion in cash and no debt, the company can weather delays or macro headwinds.

Investors should prioritize Take-Two as a gaming sector leader—a stock that turns hype into recurring revenue. The clock is ticking on GTA VI’s launch, but the pre-game momentum already makes it a buy at $238.

Action Item: Add Take-Two to your portfolio now. The “GTA VI-free” growth floor ensures stability, while the $270 analyst targets are a reminder of what’s at stake. This isn’t just a bet on a game—it’s a stake in the future of live-service gaming.

Nick Timiraos
May 16, 2025