While Take-Two Interactive Software investors won't see the latest Grand Theft Auto VI game released this year as originally planned, that hasn't affected confidence in the company's stock. The company announced that the sixth installment in the popular game series would be delayed until next year, but as of May 20, its stock price was still above the all-time high set earlier in May.
A key reason is that the market has high expectations for the company's other upcoming games, including Borderlands 4, which are expected to be blockbusters.
"You can't look at the entire gaming industry as a safe investment like Netflix, but you can look at Take-Two because the company has not been materially affected by tariffs and has a very rich product line. The growth potential from new content should outweigh the negative impact we see in any adverse scenario." Gabelli Funds portfolio manager Alec Boccanfuso said that this stock is one of his heavy holdings.
Earlier in May, the company announced it was delaying the release of Grand Theft Auto VI, originally scheduled for this fall, news that caused the stock price to fall from its all-time high. However, announcing the extension early may reduce the risk of the company reporting earnings after the market close, especially considering that Take-Two announced that it expects net bookings, a measure of revenue, to increase sequentially and hit new highs in fiscal 2026 and 2027.
The game has missed several release dates, but is widely expected to be one of the biggest hits of the decade; estimates suggest it could bring in $2 billion in net revenue in its first year. Despite the delayed revenue, Wall Street still sees the company as well-positioned amid heightened uncertainty.
"I certainly hope Grand Theft Auto will be released this year, but the pressure on this game is the most I have ever seen in my life, so rather than risk a poor user experience, it is better to delay the release and improve it," Bocanfuso said. "The revenue of this game is just delayed, not lost, and I think what the company said about the pre-order data is enough for investors to be patient and wait until the game comes out."
The latest financial report shows that Take-Two showed strong revenue growth in the fourth quarter of fiscal 2025, with net bookings reaching US$1.58 billion, exceeding expectations of US$1.55 billion.
Data shows that since the company announced that it would postpone the release of "Grand Theft Auto VI" to fiscal 2027, analysts have significantly lowered their expectations for fiscal 2026. Over the past month, analysts' forecasts for fiscal 2026 net profit have dropped by about 32%, while forecasts for revenue have been cut by 5.4%. This makes the company's stock price appear more expensive. The stock currently trades at about 32 times expected earnings, which is above the 10-year average of 26 times and nearly double Electronic Arts' 18 times earnings. But even with the downward revision, Take-Two's revenue growth is still expected to accelerate to nearly 40% in fiscal 2026, compared with just over 5% this year.
Wedbush analyst Michael Pachter wrote that even with the game's delay, he remains "very optimistic about Take-Two's trajectory through 2027, driven by a series of high-profile blockbuster titles."
The huge enthusiasm surrounding "Grand Theft Auto VI" remains unabated, and the new trailer released not long ago has supported the company's stock price and helped it recover some of the losses caused by the news of the delay.
Ahead of Take-Two's earnings report, peer companies have highlighted the industry's risk-averse nature. In Electronic Arts Inc.'s latest earnings report, net bookings were forecast to be better than expected, while video game platform Roblox Corp. Strong results were also reported, indicating that the industry was not affected by the macroeconomic backdrop. Roblox shares are up about 38% this year, while Electronic Arts shares are up just 4%, though that mostly reflects a sell-off in January amid poor preliminary results.
Among the major gaming companies in the United States, Take-Two is the most popular, as more than 90% of analysts tracked by Bloomberg recommend buying the company's stock, while nearly two-thirds of Roblox analysts recommend a buy, and just over 40% of Electronic Arts analysts recommend a buy. Still, Take-Two shares are essentially in line with analysts' average price target, suggesting that Wall Street, at least for now, doesn't think there's much room for shares to rise over the next 12 months.
"The stock's rise this year shows high expectations for this earnings report, but I think it still makes for an attractive investment," said Nate Miller, vice president of product development and management at Amplify ETFs. "We hope a new launch date can be confirmed, but we would rather wait for a high-quality product than see a rushed product. If you mess up, there is a real reputation risk, and the hype around 'Grand Theft Auto' is just too high."