Take-Two's (TTWO) Grand Theft Auto VI Hacked, Shares Drop

·3 min read

Take-Two Interactive TTWO is the latest victim of cyberattack with its upcoming Grand Theft Auto (GTA) VI getting hacked. Per a Bloomberg report, a hacker published extensive footage of the game on an online message board over the weekend.

The company’s shares were down 4.34% in pre-market trading following the news. The video-game giant’s shares have declined 30.1% compared with the Zacks Consumer Discretionary sector’s drop of 34.7% year to date.

Grand Theft Auto: Key Catalyst for Take-Two

Take Two’s growth is primarily driven by its most popular franchises, GTA, Red Dead Redemption and NBA 2K. The company’s five best-selling franchises (including GTA), in the aggregate, accounted for 83.2% of net revenues in fiscal 2022.

Developed by Rockstar Games, GTA has been the top-revenue generator for Take-Two over the years. GTA generated 30.9% of net revenues in fiscal 2022. The latest installment, GTA V, has sold more than 170 million units globally.

TakeTwo Interactive Software, Inc. Price and Consensus

TakeTwo Interactive Software, Inc. Price and Consensus
TakeTwo Interactive Software, Inc. Price and Consensus

TakeTwo Interactive Software, Inc. price-consensus-chart | TakeTwo Interactive Software, Inc. Quote

Take-Two’s first-quarter fiscal 2022 results benefited from the launch of GTA V for PlayStation 5 and Xbox series X/S, Grand Theft Auto Online standalone, and the launch of GTA+, the premium membership available exclusively on these consoles.

The latest generation console players of Grand Theft Auto Online grew more than 40% in the fiscal first quarter. The GTA Online community’s size was 49% larger than the pre-pandemic first quarter of fiscal 2020.

What Awaits Take-Two’s Shares in the Rest of 2022?

GTA VI getting hacked doesn’t bode well for Take-Two’s shares, as reflected by the pre-market decline. Per Bank of America estimates, cited by Reuters, the much-anticipated game is estimated to generate bookings of $3.5 billion at launch and an annual average of $2 billion in the long haul.

Nevertheless, Take-Two is expected to benefit from the launch of NBA 2K23 and the upcoming launches of PGA Tour 2K23 (Oct 11) and New Tales from the Borderlands (Oct 21).

The acquisition of Zynga established Take-Two as one of the largest publishers of mobile games. The deal unified Take-Two’s top-class portfolio of PC and console games, and Zynga’s leading mobile franchises.

In the fiscal first quarter, Zynga continued to experience strength in player engagement and retention.

Take-Two now expects to deliver net bookings of $5.8-$5.9 billion for fiscal 2023, of which Zynga is expected to bring in 45% and Rockstar Games 17%.

Zacks Rank & Stocks to Consider

Take-Two currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same industry are BJ’s Wholesale Club BJ, SP Plus SP and Townsquare Media TSQ, all three sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ’s Wholesale shares have gained 15% in the year-to-date period. The Zacks Consensus Estimate for BJ’s fiscal 2023 earnings has moved 7.8% higher over the past 30 days to $3.60 per share.

SP Plus shares are up 13.3% in the year-to-date period. The Zacks Consensus Estimate for SP’s 2022 earnings has increased 2.1% over the past 30 days to $2.89 per share.

Townsquare shares have lost 38.9% in the year-to-date period. The consensus mark for TSQ’s 2022 earnings has been steady at $2.10 per share over the past 30 days.

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