Should You Be Worried About Take-Two Stock

Shares of Take-Two Interactive Software (TTWO) have fallen 21% over the past twelve months, trailing the S&P 500 and its 21% return. Company executives still expect net bookings to grow about 20% in fiscal 2027, aided by the November release of Grand Theft Auto VI. During an August 7 earnings call, however, leadership hesitated to bank on the enthusiasm surrounding the new title. What is management unsure about?

Take-Two Cannot Say How Many Preorders Become Sales

Executives described Grand Theft Auto VI preorders as unprecedented in August. At the same time, they cautioned that they do not know how those advance reservations will translate into actual sales, pointing out that buyers can cancel a preorder.

When asked whether this early hype is simply pulling forward sales that Take-Two would otherwise record after the release, executives acknowledged that could be right. That is the risk for shareholders: early demand may only pull buyers forward from after the launch, and some preorders may never become sales at all.

Where Will Take-Two Find Its Fiscal 2027 Growth?

The company's financial outlook points directly to new titles. Executives expect recurring player spending in fiscal 2027 to match fiscal 2026 levels and make up 64% of net bookings. Any overall growth must therefore come from the rest of those bookings, which is where fresh releases sit. Rockstar Games, the label behind Grand Theft Auto VI, is expected to bring in about 37% of fiscal 2027 net bookings. That figure is higher than the forecasts for Take-Two's other labels, Zynga and 2K.

The underlying business is barely growing today. Net revenue rose just 2% from a year earlier in fiscal Q1 2027.

Yet investors still pay more for each dollar of Take-Two's sales than for the S&P 500: the stock trades at 5.6 times sales, against 3.1 for the index. The company lost money over the past twelve months, so its price-to-earnings ratio is not meaningful and sales provide a better yardstick. Take-Two's sales multiple has bounced between 2.5 and 8.7 times over the past ten years, so today's level is no extreme. At this price, the market appears to assume Take-Two will capture the growth management expects from its upcoming titles.

Should You Lose Sleep Over Take-Two's Preorders?

Preorders alone are no reason to lose sleep, though the official launch merits close attention. The company kept its financial outlook unchanged despite the initial wave of reservations, and said one reason is that Take-Two had not yet sold a single unit of the game. Any growth in that forecast still has to come from new games selling post-launch, led by Grand Theft Auto VI.

Grand Theft Auto VI goes on sale on November 19, and net bookings against the fiscal 2027 outlook are the measure to watch after that.

How To Act On TTWO?

Now you know TTWO better. And that's our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.

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