Take-Two jumps 10% on hint GTA 6 may arrive in 2024; seen as a ‘major catalyst for shares’

Take-Two Interactive Software (NASDAQ:) shares surged more than 10% in pre-market Thursday following the company’s reported Q4 results.

Net bookings came in at $1.39 billion, better than the consensus estimate of $1.35B. However, non-GAAP of $0.51 missed the consensus estimate of $0.69. Revenue rose to $1.45B, ahead of the expected $1.35B.

According to CEO Strauss Zelnick, the net bookings beat was driven by Grand Theft Auto V and Grand Theft Auto Online, Red Dead Redemption 2, and Zynga’s mobile portfolio.

For this quarter, TTWO expects a loss to range between $1.05 and $0.95 on revenue of $1.21-1.26B. Analysts were hoping for a loss of $0.19 on revenue of $1.42B.

The company provided its full 2024 year outlook, expecting net bookings in the range of $5.45-$5.55B, missing the consensus estimate of $6.08B. Full-year loss per share is seen between $3.05 and $2.80 on revenue of $5.37-5.47B. Analysts were expecting a loss per share of $1.45 on revenue of $6.1B.

Despite a disappointing outlook, shares surged after the CEO hinted that GTA 6 may hit the market in 2024.

“We believe that we will enter our next phase of growth in fiscal 2025, as we plan to deliver several groundbreaking titles that we anticipate will set new standards of quality and success and enable us to deliver over $8 billion in net bookings and over $1 billion in adjusted unrestricted operating cash flow,” Zelnick said.

Zelnick even discussed plans for 2026, when TTWO expects to release 17 “immersive core” games. These mid-term outlook comments boosted investor confidence in Take-Two’s visibility.

Goldman Sachs analysts hiked the price target to $165 a share on forward management commentary.

“We expect that macro conditions could remain an industry headwind in the short-term, but remain constructive on the underlying drivers of industry growth over the medium to long term. Our Buy rating on TTWO is based on the company’s idiosyncratic exposure to those thematic elements (including its multi-year content pipeline).”

Similarly, Stifel analysts raised the target to $165 per share on the Buy-rated TTWO stock.

“The headline here was the introduction of FY2025 guidance, which features a meaningful step change in financial performance and further growth thereafter, suggesting FY2024 will represent a multi-year trough for the biz going forward. And the only title, in our opinion, capable of supporting the magnitude of y/y increase reflected in next year’s net bookings forecast is…GTA VI, which we view as a major catalyst for the shares, and reason to buy (and own) TTWO.”

Additional reporting by Senad Karaahmetovic