Take-Two Interactive Software’s TTWO shares have returned 17.8% year to date (YTD), outperforming the Zacks Consumer Discretionary sector’s appreciation of 16.3% but underperforming the Zacks Toys-Games-Hobbies industry’s return of 20.2%.

TTWO’s shares have also outperformed peers like Nintendo NTDOY, Playtika PLTK, and UbiSoft Entertainment UBSFY in the same time frame. While NTDOY shares have appreciated 15.3%, PLTK and UBSFY shares have lost 5.7% and 48.4%, respectively, YTD.

TTWO shares’ performance can be attributed to the continued success of franchises like Grand Theft Auto, Borderlands and Red Dead Redemption 2, and strong growth in Zynga titles and hyper-casual gaming.

Strong Flagship Franchises Aid TTWO’s Prospects

TTWO has been benefiting from the robust performance of its flagship franchises. Grand Theft Auto V has been exceeding expectations with over 205 million units sold, while Red Dead Redemption 2 remains a bestseller, ranking in the top 10 six years post release. NBA 2K25 has achieved exceptional ratings and sold 4.5 million units, showcasing TTWO’s ability to innovate and engage audiences.

Mobile gaming is also significantly contributing to TTWO’s growth, with Zynga titles like Match Factory and Toon Blast boosting top-line growth and strong monetization efforts in hyper-casual gaming acting as key catalysts.

TTWO’s promising pipeline includes highly anticipated titles like Grand Theft Auto VI, Borderlands 4, and Mafia: The Old Country for fiscal year 2026. Furthermore, Sid Meier’s Civilization VII and WWE 2K25 launches are expected to reinforce TTWO’s market leadership.

However, TTWO faces stiff competition from the industry giants like Electronic Arts and Activision Blizzard, as well as emerging players. Macroeconomic uncertainties and sensitivity in consumer spending, particularly in mobile gaming and recurrent revenue streams, also pose challenges.

The massive 30.1% decline in advertising revenues in the second quarter of fiscal 2025 reflects headwinds in this segment. It underscores the need for TTWO to develop stronger advertising strategies to sustain its growth trajectory.

TTWO’s Earnings Estimates Indicate YoY Decline

For third-quarter fiscal 2025, Take-Two expects GAAP net revenues between $1.36 billion and $1.41 billion. Net bookings are expected to range from $1.35 billion to $1.4 billion.

For the full-year fiscal 2025, TTWO expects GAAP net revenues between $5.57 billion and $5.67 billion. Net bookings are expected to range from $5.55 billion to $5.65 billion.

The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is pegged at $1.39 billion, indicating year-over-year growth of 3.69%. The consensus mark for earnings is currently pegged at 58 cents per share, down by 2 cents over the past 30 days and indicating a year-over-year decline of 18.31%.

The Zacks Consensus Estimate for full-year fiscal 2025 revenues is pegged at $5.61 billion, indicating 5.2% year-over-year growth. The consensus mark for 2025 earnings is currently pegged at $2.51 per share, up by a penny over the past 30 days and indicating flat year-over-year growth.

TTWO has beaten the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 199.65%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

What Should Investors Do With TTWO Stock?

TTWO is benefiting from the strong performance of its flagship franchises, growth in mobile gaming and an impressive content pipeline, amid intense competition and macroeconomic uncertainties.

TTWO currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Take-Two Interactive Software, Inc. (TTWO) : Free Stock Analysis Report

Nintendo Co. (NTDOY) : Free Stock Analysis Report

UbiSoft Entertainment Inc. (UBSFY) : Free Stock Analysis Report

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