Will an Innovative Game Pipeline Drive TTWO's Net Bookings Growth?

Take-Two Interactive TTWO is benefiting from a strong product portfolio and an innovative pipeline, which are expected to drive net bookings. In fourth-quarter fiscal 2025, net bookings increased 17% year over year to $1.58 billion, driven by an impressive 14% increase in recurrent consumer spending, which accounted for 77% of total net bookings.

Take-Two benefited from strong demand for blockbuster franchises and titles such as NBA 2K25, the Grand Theft Auto series, Toon Blast, the Red Dead Redemption series and Zynga Poker.

Looking ahead, the company’s fiscal 2026 outlook reflects confidence in its growth trajectory, with net bookings projected between $5.9 billion and $6 billion.

Take-Two's upcoming release includes Mafia: The Old Country, Borderlands 4, NBA 2K26, WWE 2K26, CSR 3, Civilization VII for Switch and the highly anticipated Grand Theft Auto VI, set for May 2026. This diverse mix of iconic franchises and new IP focuses on long-term expansion and innovation across the company's publishing labels.

Take-Two Suffers From Stiff Competition

Take-Two faces stiff competition from the likes of Electronic Arts EA and Microsoft MSFT in the gaming space.

Electronic Arts reported strong performance in its fiscal fourth-quarter 2025, with net bookings rising 8% year over year to $1.8 billion. Electronic Arts has been aggressively expanding its global footprint, with a strategic focus on mobile gaming, particularly through FC Mobile. Electronic Arts is tapping into emerging markets, as FC Mobile’s four largest territories spanning the Middle East and Southeast Asia differ significantly from its traditional HD console markets, enhancing the company’s international growth prospects.

Meanwhile, Microsoft holds a significant competitive edge through its broader portfolio, combining in-house Xbox Game Studios with Activision’s blockbuster IPs. This positions Microsoft as a dominant force across console, PC and mobile platforms. While Take-Two emphasizes its proprietary hits like Grand Theft Auto and NBA 2K, Microsoft’s acquisition strategy allows it to scale more aggressively.

TTWO’s Price Performance, Valuation and Estimates

Shares of Take-Two Interactive have appreciated 25.5% year to date compared with the Zacks Gaming industry’s return of 1.8%.

TTWO YTD Price Performance Chart

From a valuation perspective, TTWO appears overvalued, trading at a forward price-to-sales ratio of 6.09, higher than the industry average of 3.22. The company carries a Value Score of F.

TTWO Forward 12 Months Valuation Chart

The Zacks Consensus Estimate for TTWO’s 2026 revenues is pegged at $5.99 billion, indicating 6.10% year-over-year growth. The consensus mark for earnings is pegged at $3.27 per share, indicating a 59.51% increase from the previous year.
 

TTWO stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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