Why Take-Two Stock's Got Game Today

Shares of Take-Two Interactive (NASDAQ:TTWO) charged sharply higher Tuesday morning, gaining as much as 10.6%. As of 1:32 p.m. ET, the stock was still up 7.5%.

The catalyst that sent the video game specialist higher was the company's financial results and commentary ahead of its highly anticipated launch later this month.

Image source: Getty Images.

By the numbers

For its fiscal 2027 second quarter (ended Sept. 30), Take-Two generated revenue of $1.5 billion, down 15% year over year. However, its loss per share of $0.29 improved from $0.73 in the prior-year quarter. Total net bookings -- which measures the total dollar value of games and services sold during the period -- declined 18% year over year to $1.6 billion, hurt by NBA 2K27, which had the second-highest net bookings in series history, but still fell below management's forecast.

For context, analysts' consensus estimates called for revenue of $1.62 billion and a loss per share of $0.86, so while Take-Two missed on the top-line, its losses weren't nearly as bad as expected.

"Uncharted territory"

Despite the tepid quarterly results, investors looked ahead to the upcoming launch of Grand Theft Auto (GTA) VI. Anticipation has been building ahead of the game's release on Nov. 19. In the earnings release, CEO Strauss Zelnick said that pre-orders for the game continue "to reach unprecedented levels."

That might be an understatement. Research firm Sensor Tower is reporting that GTA VI has already sold 9.69 million units, worth $942 million, and surpassing the $800 million GTA V made in the first 24 hours after its release -- and there are still nine days before launch.

In a statement, Zelnick said, "It's just uncharted territory with preorders trending well above our expectations."

What this means for the future

In light of the strong demand for GTA VI pre-launch, Take-Two reiterated its guidance for full-year 2027 net bookings of $8 billion to $8.2 billion. Zelnick said during the earnings call that the company wants to "avoid claiming success before it occurs" and plans to update investors after the official launch next week. That said, if presales are any indication of what we can expect from GTA VI, the coming year could be a good one for shareholders.

Take-Two is currently selling for 32 times forward earnings, well below its three-year average multiple of 56. That gives astute investors the chance to buy shares at a discount ahead of what could be Take-Two's biggest launch in years.

Danny Vena, CPA has positions in Take-Two Interactive Software. The Motley Fool has positions in and recommends Take-Two Interactive Software. The Motley Fool has a disclosure policy.