GTA VI Is Days Away: Don't Expect GTA V-Style Returns From Take-Two Stock at 5.7 Times Sales
Key PointsGTA VI arrives Nov. 19 with preorders far ahead of expectations, setting Take-Two up for what management says will be a "historic year."
Take-Two Interactive's stock (TTWO) has skyrocketed since the launch of Grand Theft Auto V (GTA V) in 2013, with investors seeing returns of 35% in a year, 163% in three years, and 673% in five years. A $1,000 investment in GTA V would have turned into over $13,000 by 2026. However, when the follow-up GTA VI is released on November 19, investors should be cautious.
Take-Two CEO Strauss Zelnick has stated that preorders for GTA VI are exceeding expectations, but the stock is already priced at 5.7 times fiscal 2026 revenue, significantly higher than the 1.4 times valuation in 2013. Analysts don't expect Take-Two's market capitalization to reach $102 billion in five years, given the high expectations for the new game.
The biggest risk is that GTA VI, while a hit, might not live up to the high expectations set, leaving little room for disappointment in the stock's valuation. Until Take-Two reports holiday sales, investors should wait before jumping on the post-earnings bounce.
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