After the highly awaited Grand Theft Auto VI trailer surfaced on Monday evening before its scheduled Tuesday morning release, shares of Take-Two Interactive Software Inc
The preview, which was later posted on Rockstar's official YouTube channel, is currently the second most-viewed video game trailer on the platform with 72 million views, behind GTA V's trailer 95 million.
Take-Two's shares bounced back a bit Tuesday morning, but are at in late afternoon, still down 1.58% at $155.07.
Oppenheimer Analyst Martin Yang gave the stock an Outperform rating, with a 12-18 month price target of $170.
Yang's analysis was based on a valuation model, with the $170 price target derived from 24 times the FY25 EPS of $6.97E.
This earnings forecast encompassed factors such as an accelerated cadence of new game releases, driven by new IP, sequels of existing IPs and the remastering of existing IPs for new platforms.
Additionally, it considered the continued growth and increased revenue mix share of higher-margin recurring revenues from core franchises like GTA, RDR and NBA 2K, providing better visibility and improved profitability for Take-Two Interactive.
"We believe Take-Two Interactive stands to benefit from both company-specific factors as well as industry tailwinds driving both top-line growth and profitability gains," Yang wrote in an analyst note.
Yang also laid out a question: "How will Rockstar plan the succession for current GTA Online after GTV VI's release?" This question holds significant sway over the long-term success of GTA VI beyond its initial two years. As of now, the trailer provides no indications about this aspect.
Meanwhile, Raymond James analyst Andrew Marok maintained an Outperform stock rating.
Marok pointed out the release date for GTA VI appears to be slightly delayed, with the trailer hinting at a 2025 launch, deviating from Raymond James' previous estimate of a holiday 2024 debut (Take-Two Interactive's F3Q25).
"While investors are likely to be mildly disappointed in the precise timing, and we expect a slight down move in the stock as a result, this does not change our thesis on the anticipated scale of the release when it does hit shelves, which remains potentially massive," Marok said in an analyst note.
"It is simply a shift rather than a reduction in expectations," he added.
The GTA VI trailer primarily showcased an intricately detailed Vice City setting, confirming rumors about the game's location and the inclusion of a female protagonist, Lucia.
It teased various gameplay elements such as diverse settings and an Instagram Live-like in-game social media feed, although their impact on gameplay remains uncertain.
The trailer's portrayal of Vice City suggested an immersive environment rich with detailed landscapes and bustling non-playable characters, potentially surpassing GTA V's Los Santos in depth and criminal opportunities if realized in the actual game. However, it's worth noting that cinematic trailers often exceed actual gameplay details.
