Skip to Content
Stock Analyst Update

Substantial Fair Value Hike on Take-Two

We're raising our fair value estimate on the narrow-moat gamemaker based on the projected launch of 'Grand Theft Auto VI.'


We are raising our fair value estimate for narrow–moat  Take-Two (TTWO) to $114 from $79 as we are incorporating the impact of the projected release of "Grand Theft Auto VI" in fiscal 2022. We believe the game will launch around the arrival of next console generation that we expect to occur in 2021 or 2022.

The success of "GTA Online" over the past four years demonstrates the firm's ability to monetize its games while attracting considerably less backlash than other similar titles. We expect that Rockstar will create a similar online mode for its next big single-player game, "Red Dead Redemption 2," which is expected to launch in October. While "RDR 2" is the firm's most hyped title for the near future, the potential launch of "GTA VI" remains the biggest potential catalyst for the firm even after the diversification of its game portfolio. The fifth installment of the game is one of the most successful media releases of all time with over 95 million units sold since its launch in 2013.

Post-E3, we have become increasingly convinced that a new console generation will launch in the second half of 2020 or 2021. We expect both Microsoft and Sony to release consoles within a year of each other with Sony more likely to launch first. Given this background and the release of "RDR 2" this fall, we now project that Take-Two will likely launch the next installment of "GTA" in fall 2021 or fiscal 2022 which will give "RDR 2" a three-year window. "GTA VI" will also be able to be sold to the large installed base for the current generation while being compatible on the new generation of consoles with improved graphics. Given the success of "GTA Online," we expect Rockstar to include a new and improved version of the mode in "GTA VI," which should help with margin expansion. As a result, we now project that fiscal 2022 revenue for Take-Two will spike up by 78% to $5.5 billion with fiscal 2023 revenue falling from those heights by 24%.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.