All eyes within the gaming world are on Rockstar Games today, a studio owned by Take-Two Interactive Software (TTWO).
The studio is known for games like Red Dead Redemption, NBA 2k, but more notably, the Grand Theft Auto lineup. And after more than 10 years, the latest iteration in the GTA series has life.
Rockstar Games is set to release the first official trailer for the highly-anticipated GTA VI video game. This is something gamers have been awaiting since GTA V took the world by storm back in 2013.
That game went on to sell more than 32.5 million units that year and another 12.5 million the following year for good measure. At a price tag of $60, that equated to more than $2.7 billion in sales. But, that figure is dramatically higher in looking at the total units sold since the game’s inception – $11.4 billion.
That’s only the purchase of the game, which is just the tip of the iceberg. Take-Two is also profiting from in-game purchases, which are said to add billions of dollars to the bottom line.
Now the focus turns to the future. What could GTA VI do for Take-Two? Analysts are already speculating on how much this game could bring in.
Using an average selling price of $70 (it’s not uncommon for games like this to be priced at $100 each with add-ons) and a modest 40 million units in year one, that’s $2.8 billion in sales. That’s more than half of the company’s trailing 12-month revenue.
With GTA VI still not set to release until 2025, though, that buoy is not going to provide a lift in fiscal 2024. So, where does that leave investors in the meantime? The stock has fallen more than 2% in Tuesday morning trading leading into the trailer release, which is not what the company was hoping a teaser would do.
That being said, TTWO has gained more than 40% in the last year and 10% in the last month alone as hype continues to mount for GTA VI. We’ve taken a deeper look through the VectorVest stock analysis software and uncovered 3 things you need to see.
TTWO Has Poor Upside Potential, Very Good Safety, and Fair Timing
VectorVest simplifies your trading strategy through an intuitive proprietary stock-rating system. You’re given all the insights you need in 3 simple ratings: relative value (RV), relative safety (RS), and relative timing (RT).
Each sits on its own scale of 0.00-2.00 with 1.00 being the average. This makes interpretation quick and easy, empowering you to win more trades with less work and less stress. It gets even easier, though. The system gives you a buy, sell, or hold recommendation for any given stock at any given time. As for TTWO, here’s what you need to see:
- Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years ahead) to AAA corporate bond rates and risk. This indicator offers far superior insights than a simple comparison of price to value alone. As for TTWO, the RV rating of 0.51 is poor.
- Very Good Safety: The RS rating is an indicator of risk. It comes from a deep analysis of a company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. TTWO has a very good RS rating of 1.31 right now.
- Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year. Even though the stock is dropping today, TTWO still has fair timing, with an RT rating above the average at 1.06.
The overall VST rating of 1.04 is considered fair, and is accompanied by a HOLD recommendation in the VectorVest system. You can learn more about how the system works or the current opportunity with any given stock through a free stock analysis today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. TTWO is falling leading into the release of its highly anticipated GTA VI trailer. The stock has poor upside potential, very good safety, and fair timing right now.
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