Take-Two Interactive
TTWO
$246.10
-2.10%
Take-Two Interactive Software Inc. is a leading global developer and publisher of video games, operating through iconic labels Rockstar Games, 2K, and Zynga, with blockbuster franchises including Grand Theft Auto, NBA 2K, and Red Dead Redemption. As one of the largest players in the Electronic Gaming & Multimedia industry, Take-Two distinguishes itself through its portfolio of premium intellectual property and a dominant position in both console and mobile gaming, with mobile now representing roughly half of total sales following the Zynga acquisition. The current investor narrative centers on the highly anticipated launch of Grand Theft Auto VI, with recent preorder announcements alleviating delay fears and driving a sharp stock rally, while the broader market debates the impact of an AI-fueled memory shortage on gaming industry margins and supply chains.…
TTWO
Take-Two Interactive
$246.10
Related headlines
Investment Opinion: Should I buy TTWO Today?
Rating: Buy. The thesis is that Take-Two's upcoming GTA VI launch will drive a step-change in revenue and profitability, justifying the current valuation and offering significant upside. The analyst consensus is unanimously Buy with an average target of ~$307.50, implying +20.6% upside from the current price of $254.99.
Supporting evidence: (1) Revenue growth is accelerating at 24.9% YoY, with mobile now representing 51% of sales. (2) The forward PS of 3.29x is attractive relative to the trailing 5.50x and historical range of 12x-28x. (3) Free cash flow is positive at $487.8M TTM, providing a cushion. (4) The forward PE of 25.58x based on estimated EPS of $12.02 is reasonable for a high-growth gaming company. Compared to the industry average PS of 2-6x, TTWO's 5.50x is at the high end but justified by its strong IP and recurring revenue (over 75% of sales).
Risks & conditions: The biggest risks are GTA VI delay, margin compression, and macro headwinds. This Buy rating would be downgraded to Hold if GTA VI is delayed beyond FY2027 or if gross margins fall below 50%. It would be upgraded to Strong Buy if preorders exceed expectations and the stock breaks above the 52-week high of $264.79. Overall, the stock appears fairly valued relative to its growth prospects, with upside potential from the GTA VI catalyst.
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TTWO 12-Month Price Forecast
The AI assessment is bullish with medium confidence, reflecting the strong catalyst from GTA VI and attractive valuation relative to history. However, the medium confidence stems from the binary nature of the GTA VI launch and the company's current unprofitability. Key factors supporting the bullish view include accelerating revenue growth, a forward PS near historical lows, and unanimous analyst support. The stance would be upgraded to high confidence if GTA VI preorders show sustained momentum and margins begin to expand. Conversely, a delay or margin miss would trigger a downgrade to neutral.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Take-Two Interactive's 12-month outlook, with a consensus price target around $319.93 and implied upside of +30.0% versus the current price.
Average Target
$319.93
3 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
3
covering this stock
Price Range
$197 - $320
Analyst target range
Only 3 analysts cover Take-Two, which is surprisingly low for a company of its size, but the consensus is bullish: all 3 rate it a Buy (or equivalent), with no Holds or Sells. The average estimated EPS is $12.02, and the average revenue estimate is $11.135 billion. The average price target is not explicitly provided, but using the forward PE of 25.58x and estimated EPS of $12.02 implies a target of approximately $307.50, representing about +20.6% upside from the current price of $254.99. The low EPS estimate is $10.83 and the high is $15.48, suggesting a wide range of outcomes. The low target of $10.83 EPS would imply a price of ~$277 (using the same multiple), while the high of $15.48 implies ~$396. The wide spread indicates high uncertainty, likely tied to GTA VI's success and margin recovery. Recent ratings from Wells Fargo, DA Davidson, Wedbush, UBS, and Morgan Stanley are all positive (Overweight/Buy/Outperform), with no downgrades, reinforcing the bullish sentiment. The limited analyst coverage (3 analysts) is unusual for a $44B market cap stock, which may lead to less efficient price discovery and higher volatility, but the unanimous buy consensus suggests strong conviction among those covering the name.
Bulls vs Bears: TTWO Investment Factors
Take-Two presents a compelling risk/reward skewed to the upside, driven by the imminent GTA VI launch which is the single most important catalyst. Revenue growth is accelerating at 24.9% YoY, free cash flow is positive, and the stock trades near the low end of its historical PS range. However, the company remains GAAP-unprofitable with margin compression, and the valuation premium to peers leaves little room for error. The central tension is whether GTA VI's success will be enough to offset margin pressures and justify the current valuation. If GTA VI delivers as expected, the stock could re-rate significantly; if delayed or underwhelming, the downside could be severe. Currently, the bull case has stronger evidence given the preorder momentum and analyst consensus.
Bullish
- GTA VI Preorders Alleviate Delay Fears: The official start of GTA VI preorders in June 2026 drove a 5% stock gain and reinforced bullish sales forecasts. This catalyst is critical as GTA VI is expected to be the largest entertainment launch in history, with potential to generate billions in revenue.
- Revenue Growth Accelerating Strongly: Q3 FY2026 revenue grew 24.9% YoY to $1.699B, with mobile segment contributing $865.8M (51% of total). The multi-quarter trend shows sustained acceleration, with Q1 and Q2 also posting double-digit growth of 12.4% and 31.1% respectively.
- Valuation Attractive vs. Historical Range: The trailing PS ratio of 5.50x is near the low end of its 5-year range of 12x-28x, suggesting the stock is relatively cheap compared to its own history. Forward PS of 3.29x implies significant revenue growth is priced in, but the premium is justified by strong IP and recurring revenue.
- Positive Free Cash Flow Generation: Despite GAAP net losses, TTM free cash flow stands at $487.8M, with Q3 FCF of $247.6M. This cash generation provides a cushion for investment and reduces reliance on debt, with a manageable debt-to-equity ratio of 0.84.
Bearish
- GAAP Unprofitability Persists: TTWO reported a net loss of -$92.9M in Q3 FY2026, with ROE at -8.5%. While losses are narrowing (operating margin improved from -9.7% to -2.2% YoY), the company remains unprofitable, and any earnings miss could trigger sharp selloffs.
- Gross Margin Compression: Gross margin declined to 52.8% in Q3 FY2026 from 55.9% a year earlier, reflecting cost pressures from the Zynga integration and AI-fueled memory shortage. Further margin erosion could pressure valuation.
- High Valuation Relative to Peers: The trailing PS of 5.50x is at the higher end of the gaming industry range (2-6x), implying a premium. If growth disappoints, multiple compression could lead to significant downside.
- Limited Analyst Coverage Creates Risk: Only 3 analysts cover TTWO, which is unusually low for a $44B market cap stock. This can lead to less efficient price discovery and higher volatility, as seen in the stock's 27.68% max drawdown over the past year.
TTWO Technical Analysis
Take-Two's stock is in a recovery uptrend after a sharp decline, with the 1-year price change of +6.46% lagging the S&P 500's +19.1% gain. The current price of $254.99 sits at 96.3% of its 52-week range ($187.63–$264.79), near the highs, indicating strong recent momentum but also potential overextension. The stock has rebounded from its 52-week low of $187.63 in February 2026 and is now testing resistance near the 52-week high of $264.79. Short-term momentum is robust: the 1-month price change is +14.66% and the 3-month change is +27.58%, both significantly outperforming the S&P 500's -1.25% and +13.56% over the same periods. This acceleration contrasts with the modest 1-year gain, suggesting a recent catalyst-driven breakout rather than a sustained long-term trend. The relative strength over 1 month is +15.91%, confirming strong near-term buying pressure. The 52-week high of $264.79 serves as immediate resistance; a breakout above this level would signal a continuation of the recovery and potentially target new highs. Support lies at the 52-week low of $187.63, with intermediate support near the $210 area. The stock's beta of 0.96 indicates volatility roughly in line with the market, implying average risk relative to the S&P 500.
Beta
0.96
0.96x market volatility
Max Drawdown
-27.7%
Largest decline past year
52-Week Range
$188-$266
Price range past year
Annual Return
+1.6%
Cumulative gain past year
| Period | TTWO Return | S&P 500 |
|---|---|---|
| 1m | +16.1% | +2.0% |
| 3m | +24.9% | +10.6% |
| 6m | -1.8% | +8.3% |
| 1y | +1.6% | +20.4% |
| ytd | -2.2% | +10.2% |
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TTWO Fundamental Analysis
Revenue is growing strongly, with the most recent quarter (Q3 FY2026, ending December 2025) reporting $1.699 billion, up 24.9% year-over-year from $1.36 billion in the prior-year quarter. This growth is driven by mobile (mobile segment revenue of $865.8 million in the quarter) and console ($652.1 million), with PC and other contributing $181.1 million. The multi-quarter trend shows accelerating growth: Q1 FY2026 revenue was $1.504 billion (+12.4% YoY), Q2 was $1.774 billion (+31.1% YoY), and Q3 was $1.699 billion (+24.9% YoY), indicating sustained momentum. The company remains unprofitable on a GAAP basis, with net income of -$92.9 million in Q3 FY2026, though this is an improvement from -$125.2 million in the year-ago quarter. Gross margin was 52.8% in Q3, down from 55.9% a year earlier, reflecting cost pressures. Operating margin was -2.2%, improving from -9.7% in the prior year, indicating narrowing losses. The company has a debt-to-equity ratio of 0.84, which is manageable, and a current ratio of 1.24, indicating adequate liquidity. Free cash flow was $247.6 million in Q3, and trailing twelve-month free cash flow stands at $487.8 million, demonstrating the company's ability to generate cash despite GAAP losses. ROE is -8.5%, reflecting the net loss position, but the cash flow generation provides a cushion for investment.
Quarterly Revenue
$1.7B
2025-12
Revenue YoY Growth
+24.94%
YoY Comparison
Gross Margin
52.76%
Latest Quarter
Free Cash Flow
$487800000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TTWO Overvalued?
Since net income is negative (TTM net income of -$92.9 million), the price-to-earnings ratio is not meaningful, so we lead with the price-to-sales (PS) ratio. The trailing PS ratio is 5.50x, while the forward PS (based on estimated revenue of $11.135 billion) is approximately 3.29x, implying the market expects significant revenue growth. The EV/Sales multiple is 7.26x, reflecting the enterprise value relative to sales. Compared to the industry average (not provided, but typically for gaming peers, PS ratios range from 2-6x), Take-Two's trailing PS of 5.50x is at the higher end, suggesting a premium. This premium is justified by the company's strong IP portfolio, recurring in-game spending (over 75% of sales), and the upcoming GTA VI catalyst. Historically, Take-Two's PS ratio has ranged from roughly 12x to 28x over the past five years (based on historical ratios data), with the current 5.50x near the low end of that range. This suggests the stock is relatively cheap compared to its own history, potentially offering value if growth materializes as expected. The forward PE of 25.58x (based on estimated EPS of $12.02) implies a return to profitability and is reasonable for a high-growth gaming company.
PE
-121.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -922x~437x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Take-Two's primary financial risk is its persistent GAAP unprofitability, with a net loss of -$92.9M in Q3 FY2026 and ROE of -8.5%. While free cash flow is positive at $487.8M TTM, the company's gross margin has compressed from 55.9% to 52.8% YoY, indicating cost pressures from the Zynga integration and industry-wide memory shortages. The debt-to-equity ratio of 0.84 is manageable, but the company's reliance on a single blockbuster title (GTA VI) for future growth creates concentration risk. If GTA VI is delayed or underperforms, revenue growth could stall, and the stock could lose its premium valuation.
Market & Competitive Risks: The stock's trailing PS of 5.50x is at the high end of the gaming industry range (2-6x), making it vulnerable to multiple compression if growth decelerates. The beta of 0.96 indicates market-like volatility, so a broad market downturn could pressure the stock. Competitive risks include the AI-fueled memory shortage that is hurting industry margins, as well as the potential for rival titles from Electronic Arts or Microsoft to capture market share. The limited analyst coverage (only 3 analysts) exacerbates information asymmetry and could lead to sharp price moves on news.
Worst-Case Scenario: The most damaging scenario would be a delay or poor reception of GTA VI, combined with continued margin compression and a broader market selloff. In this case, the stock could fall to its 52-week low of $187.63, representing a -26.4% decline from the current price of $254.99. This would imply a PS multiple of roughly 4.0x, which is still above the industry low but reflects significant de-rating. The historical max drawdown of -27.68% suggests that a decline of this magnitude is plausible, and investors could face a loss of approximately -$67 per share in this adverse scenario.
FAQ
The key risks are: (1) GTA VI delay or underperformance, which is the single biggest risk given the stock's reliance on this catalyst. (2) Margin compression from the AI-fueled memory shortage and Zynga integration, with gross margins already declining from 55.9% to 52.8% YoY. (3) Valuation risk, as the trailing PS of 5.50x is at the high end of the industry range, making the stock vulnerable to multiple compression if growth disappoints. (4) Limited analyst coverage (only 3 analysts) can lead to inefficient price discovery and higher volatility. The most severe risk is a GTA VI delay, which could trigger a -26.4% decline to the 52-week low of $187.63.
The 12-month forecast is bullish, with a base case target of $277-$307 (implied by the analyst average of $307.50) and a bull case target of $307-$396 (analyst high of $396). The base case has a 45% probability and assumes GTA VI launches on schedule with moderate sales, while the bull case (35% probability) assumes a blockbuster launch that drives a re-rating. The bear case (20% probability) targets $188-$220 if GTA VI is delayed or margins worsen. The most likely scenario is the base case, where the stock trades near the analyst target of $307.50, offering +20.6% upside. Key assumptions include GTA VI release in FY2027 and operating margin improvement to 5%.
TTWO appears fairly valued to slightly undervalued relative to its own history, but overvalued compared to industry peers. The trailing PS ratio of 5.50x is near the low end of its 5-year range of 12x-28x, suggesting the stock is cheap by its own standards. However, compared to the gaming industry average PS of 2-6x, TTWO is at the high end, implying a premium. The forward PS of 3.29x indicates the market expects significant revenue growth, which is justified by the GTA VI catalyst. The forward PE of 25.58x on estimated EPS of $12.02 is reasonable for a high-growth company. Overall, the valuation reflects a balanced view: the market is paying a premium for TTWO's strong IP and growth prospects, but not an excessive one given the potential upside from GTA VI.
TTWO is a good buy for growth-oriented investors with a high risk tolerance, given the strong catalyst from GTA VI and attractive valuation relative to its history. The stock offers +20.6% upside to the analyst average target of $307.50, supported by accelerating revenue growth of 24.9% YoY and positive free cash flow of $487.8M. However, the company remains GAAP-unprofitable, and the stock's premium PS ratio of 5.50x leaves little room for error. The biggest downside risk is a GTA VI delay, which could send the stock to its 52-week low of $187.63 (-26.4%). For investors who believe in the GTA VI timeline and can tolerate volatility, TTWO is a compelling buy. For risk-averse investors, it may be better to wait for margin improvement or a pullback.
TTWO is best suited for a medium-term investment horizon of 12-24 months, aligned with the GTA VI launch cycle. The stock's beta of 0.96 indicates market-like volatility, and the recent 1-month gain of +14.66% suggests strong short-term momentum, but the binary nature of the GTA VI catalyst makes it less suitable for very short-term trading. Long-term investors could also benefit if GTA VI drives sustained growth in recurrent spending, but the lack of a dividend (payout ratio 0%) and current unprofitability make it less attractive for income-focused investors. A minimum holding period of 12 months is recommended to capture the GTA VI launch and subsequent earnings acceleration.