Take-Two Interactive: Zynga’s Direct-to-Consumer Pivot Drives Structural Margin Expansion and Supports Buy Rating

Alicia Reese, an analyst from Wedbush, maintained the Buy rating on Take-Two. The associated price target is $300.00.

Alicia Reese has given his Buy rating due to a combination of factors tied to Take-Two’s emerging direct-to-consumer strategy at Zynga, which is sharply reducing reliance on traditional app-store billing. By using seamless in-app web views that mimic native payment flows and offering extra in-game currency, Zynga is successfully steering high-spending players toward lower-cost payment channels, structurally improving unit economics and recurring cash generation.

Reese believes this frictionless checkout can roughly double direct-to-consumer penetration at Zynga over the next 12–18 months, shifting a meaningful portion of bookings from a 30% platform fee to a materially lower web processing cost. The resulting uplift in net revenue per transaction enhances user lifetime value and enables more aggressive, yet still profitable, user acquisition bidding, creating a self-reinforcing growth and margin expansion cycle even as the legal framework around app-store fees continues to evolve.

In another report released on February 26, BMO Capital also reiterated a Buy rating on the stock with a $280.00 price target.