TTWO & GTA VI | IM ALL IN đź’¸
Updated
Long term guidance made by the management confirmed that GTA VI Is for the Fiscal Year 25. Without more explanations on where these numbers precisely come from, management expects to generate >
8BN of bookings and >11BN of unrestricted operating cash flow in FY25, with further growth in FY26. these strong numbers can only be the result of the release of the long-awaited GTA VI.Also a tweet signed by Sam Houser, Rockstar Games cofounder and president affirms that a trailer will be released as soon as early December.
On the 11th of August 2023, Rockstar Games officially acquired Cfx. Cfx is a group of developers focused on enhancing gaming experiences through platforms like FiveM and RedM. These platforms enable multiplayer mods on customized dedicated servers for Grand Theft Auto V and Red Dead Redemption 2, respectively. In our opinion, user-generated content is becoming more and more crucial as customers are looking for a more immersive and personalized experience through mods notably.
At Growth Arcane GTA VI might be the closest gaming experience to the Idea of Metaverse.For now, all the mods used to be available for free, but thanks to this wise acquisition, we believe in a monetization opportunity supporting the license growth. As Rockstar Games attracted some of the most talented mod developers, we expect it to monetize them just as Roblox does.
TakeTwo Interactive reported strong results for the second quarter of fiscal year 2024, with net bookings reaching $1.44 billion, exceeding expectations. The company's key titles, including Grand Theft Auto V, Grand Theft Auto Online, and Red Dead Redemption 2, continued to perform exceptionally well. Strauss Zelnick, the CEO expressed optimism about the company's multiyear growth trajectory, citing a robust and diverse development pipeline.
Notable achievements included GTA V surpassing 190 million units in sales
The successful launch of NBA 2K24, which sold over 4.5 million units must also be noted. The GTA+ membership program and Rockstar Games' CitizenFX collaboration were highlighted.
Zynga contributed to the solid results with successful game launches, including PowerSlap and Top Troops. The company also provided an update on Star Wars Hunters and announced plans for the global launch of Game of Thrones Legends, an RPG puzzle-oriented mobile title.
Financially speaking, no major surprises. These earnings meet our expectations. Take-Two reiterated its fiscal year 2024 net bookings guidance of $5.45 billion to $5.55 billion. Recurrent consumer spending accounted for 78% of net bookings showing the resilience of the business, and the company highlighted progress in profitability initiatives, including the expansion of its mobile games and hyper casual business.
To compute our Valuation, we decided to use the P/S ratio of TTWO as the firm is still not profitable. We expect the firm to become profitable as soon as next year. Looking at next year's revenues, we expect a 3% growth rate. This growth rate is low as we see GTA VI to be released in 2025 and not in 2024. But still, with such a low growth rate, the firm trades at an important discount compared to its peers. This discount is close to 26%. As we are getting closer to the release of GTA VI we expect fewer operating expenses and better margins supporting the investment thesis. Note that for 2025, we forecast a 45% top-line revenue growth. For all these reasons we expect a strong upside and consider the current discount as being unjustified.
The current valuation implies a 26% upside in our view,TTWO next targets are 160, 180 and 200$
8BN of bookings and >11BN of unrestricted operating cash flow in FY25, with further growth in FY26. these strong numbers can only be the result of the release of the long-awaited GTA VI.Also a tweet signed by Sam Houser, Rockstar Games cofounder and president affirms that a trailer will be released as soon as early December.On the 11th of August 2023, Rockstar Games officially acquired Cfx. Cfx is a group of developers focused on enhancing gaming experiences through platforms like FiveM and RedM. These platforms enable multiplayer mods on customized dedicated servers for Grand Theft Auto V and Red Dead Redemption 2, respectively. In our opinion, user-generated content is becoming more and more crucial as customers are looking for a more immersive and personalized experience through mods notably.
At Growth Arcane GTA VI might be the closest gaming experience to the Idea of Metaverse.For now, all the mods used to be available for free, but thanks to this wise acquisition, we believe in a monetization opportunity supporting the license growth. As Rockstar Games attracted some of the most talented mod developers, we expect it to monetize them just as Roblox does.
TakeTwo Interactive reported strong results for the second quarter of fiscal year 2024, with net bookings reaching $1.44 billion, exceeding expectations. The company's key titles, including Grand Theft Auto V, Grand Theft Auto Online, and Red Dead Redemption 2, continued to perform exceptionally well. Strauss Zelnick, the CEO expressed optimism about the company's multiyear growth trajectory, citing a robust and diverse development pipeline.
Notable achievements included GTA V surpassing 190 million units in sales
The successful launch of NBA 2K24, which sold over 4.5 million units must also be noted. The GTA+ membership program and Rockstar Games' CitizenFX collaboration were highlighted.
Zynga contributed to the solid results with successful game launches, including PowerSlap and Top Troops. The company also provided an update on Star Wars Hunters and announced plans for the global launch of Game of Thrones Legends, an RPG puzzle-oriented mobile title.
Financially speaking, no major surprises. These earnings meet our expectations. Take-Two reiterated its fiscal year 2024 net bookings guidance of $5.45 billion to $5.55 billion. Recurrent consumer spending accounted for 78% of net bookings showing the resilience of the business, and the company highlighted progress in profitability initiatives, including the expansion of its mobile games and hyper casual business.
To compute our Valuation, we decided to use the P/S ratio of TTWO as the firm is still not profitable. We expect the firm to become profitable as soon as next year. Looking at next year's revenues, we expect a 3% growth rate. This growth rate is low as we see GTA VI to be released in 2025 and not in 2024. But still, with such a low growth rate, the firm trades at an important discount compared to its peers. This discount is close to 26%. As we are getting closer to the release of GTA VI we expect fewer operating expenses and better margins supporting the investment thesis. Note that for 2025, we forecast a 45% top-line revenue growth. For all these reasons we expect a strong upside and consider the current discount as being unjustified.
The current valuation implies a 26% upside in our view,TTWO next targets are 160, 180 and 200$
Note
GTA 6's First Trailer Coming December 5Trade active
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