Take-Two Interactive Software: Taking A Moment To Review The Risks (NASDAQ:TTWO)
Summary
The company has reported a loss for the last few quarters which could be attributed to its increased operating expenses as a result of Zyngas acquisition and I could not see actual guidance for a return to profitability. GTA VI is widely anticipated to be a big hit and drive the companys revenues for the foreseeable future. The current valuation of the company is in tune with this anticipation and the multiples may even expand based on how well the game is received by the public. There could be a scenario where the game receives lukewarm reception but continues to pick up steam in the following years but its hard to dismiss the medium-term risks with the company. • Markets focus on profitability could suppress the price until Take-Two is able to demonstrate how its recent actions are helping the company get back to profitability • Any news of the delayed release, problems linked to the development, or other troubles related to GTA VI will weigh down the stock.
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