TTWO - Take-Two: Bullish On GTA VI But Neutral On The Stock
2024-02-15 14:09:40 ET
Summary
- GTA VI's potential to catalyze an unprecedented cash influx for Take-Two in the medium term is undisputed.
- This presents a potential trading opportunity over the course of a few years.
- However, as a longer-term investor, I view Take-Two as neutral and refrain from making a purchase.
- This is also because the current valuation likely already prices in a lot.
Beware of GTA VI Hype-induced Tunnel Vision
If you're considering buying Take-Two Interactive Software, Inc. (TTWO) stocks solely in hopeful anticipation of GTA VI, then I encourage you to rethink this decision with this article. While a euphoric bull run surrounding GTA VI is certainly within the realm of possibility over the next few years — whether through multiple expansions or fundamentally justified — I argue that GTA VI should not be the sole reason to buy Take-Two. This is for two main reasons:
- An already high valuation, which factors in the GTA VI hype
- Take-Two no longer solely or mainly represents the well-known iconic Rockstar Games franchises as it once did. Now, following the costly Zynga acquisition, half of its identity is tied to mobile gaming, diluting Rockstar Games within the conglomerate.