Investors understandably worry about having missed out on Take-Two Interactive (TTWO 0.72%) stock. The video game developer's shares have jumped over 50% in the past year, easily outperforming peers like Electronic Arts (EA 0.46%). It's no secret that Take-Two is about to unleash a flood of new content that's likely to push its revenue footprint up to a new level. Most investors are expecting an over 40% sales spike in the new fiscal year.

That optimism could make it harder for shareholders to see market-thumping returns from this stock in 2024. Yet, does its 2023 rally mean Take-Two's best days are behind it? Let's take a closer look.

The latest trends

Wall Street sure isn't bidding up Take-Two stock in response to its current lackluster operating trends. Bookings fell in the most recent quarter, and the company is generating substantial -- and growing -- net losses. Most Wall Street pros are expecting similarly weak results through the end of the fiscal year that runs through late March, too. Sales should rise by just 4% for the period.

Yet, there were some bright spots in Take-Two's latest earnings update. Recurrent spending still accounts for nearly 80% of the business thanks to solid subscription-based demand in franchises like NBA 2K and Grand Theft Auto (GTA).

Earnings also look much better when you strip out the one-time impact from write-down charges. Non-GAAP (generally accepted accounting principles) profits rose to $137 million over the last six months, in fact, up from $118 million a year earlier. Investors are clearly hoping that Take-Two can build on this positive momentum with its influx of game releases on the way.

The new portfolio

There's a truly packed pipeline for the next eight quarters or so. Take-Two is planning dozens of major releases through fiscal 2025, including a fresh installment in its leading GTA franchise. Toss in the recently added Zynga portfolio that covers the casual gaming niche and Take-Two seems ready to challenge the industry leaders in terms of audience size and annual earnings. The company is targeting $8 billion of revenue next year, roughly the same as EA's current production.

The problem is these gains are all theoretical at this point. Many of its big titles haven't been officially announced yet, leaving the timing and scope of these games uncertain. Take-Two could delay one or more of them due to development challenges or a softer-than-expected consumer spending environment. And there's always the risk of other big-name releases from Microsoft, EA, and others soaking up market share.

Wait and see

That uncertainty alone shouldn't be enough to keep investors away from this video game stock. Take-Two seems likely to be in a much stronger sales and earnings position by early 2025. Still, that doesn't mean investors shouldn't wait for a potentially better price.

Take-Two is valued at an expensive 5 times annual earnings today, while you can own EA for the same valuation and secure a more profitable industry leader with highly sustainable earnings. It's true that Take-Two stock should close that performance gap over the next year.

But the chance that it underperforms Wall Street's high expectations should have investors feeling cautious about jumping into shares in hopes of enjoying another market-thumping rally in 2024.