TTWO
TTWOTake-Two Interactive is a leading publisher of interactive entertainment software, operating in the prepackaged software industry.
It is globally recognized for its critically acclaimed and commercially successful franchises like Grand Theft Auto and Red Dead Redemption.
Updated: January 13, 2026, 16:00 EST
Investment Opinion: Should I buy TTWO Today?
Based on the technical, fundamental, and valuation analysis, TTWO presents a high-risk proposition that is difficult to recommend for purchase at this time.
From a technical perspective, the stock displays weak momentum, significantly underperforming the market over the past three months. Fundamentally, while revenue growth is solid, the company has swung to an operating loss, indicating that heavy spending on marketing and development is eroding profitability. This lack of earnings makes traditional valuation metrics alarming, with a negative P/E ratio and an extremely high EV/EBITDA suggesting the stock is priced at a substantial premium to its current financial reality.
Recommendation: HOLD / NOT WORTH BUYING TTWO is in a challenging investment phase where it is prioritizing growth over profitability. Until there are clear signs that its significant expenditures will translate into sustainable earnings, the stock carries substantial downside risk. Investors should wait for a demonstrable improvement in profitability and a more reasonable valuation before considering a position. The current price does not adequately compensate for the fundamental weaknesses observed.
TTWO 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month outlook for Take-Two Interactive (TTWO).
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12-Month Outlook for TTWO:
The primary catalyst for TTWO is the highly anticipated fall 2025 launch of *Grand Theft Auto VI*. This event is expected to be a monumental driver of revenue and investor sentiment, potentially justifying the company's current heavy investment phase. However, the key risk remains the timing and execution of this launch, coupled with the near-term financial strain from significant spending on marketing and development, which has led to recent operating losses. In the absence of current analyst targets, the stock's performance will likely hinge on market anticipation for GTA VI, but investors should be prepared for volatility until there is clearer evidence that these investments will translate into sustainable profitability.
Wall Street Consensus
Most Wall Street analysts are optimistic about TTWO's 12-month outlook, with consensus target around $244.36, indicating expected upside potential.
Bulls vs Bears: TTWO Investment Factors
Overall, TTWO has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Earnings Beat: Company significantly exceeded analyst estimates for fiscal Q2 earnings.
- Analyst Upgrade Opportunity: Some analysts view the stock dip as a buying opportunity.
- Analyst Estimate Boosts: Following earnings, analysts are raising their future financial estimates.
- GTA VI Demand Undiminished: Underlying high demand for the delayed GTA VI remains a future catalyst.
Bearish
- GTA VI Release Delay: Highly anticipated Grand Theft Auto VI release delayed by six months.
- Significant Stock Price Decline: Stock fell over 8% due to the delay announcement.
- Negative Market Reaction: Stock declined against a generally positive broader market.
- High Investor Expectations: Strong earnings were overshadowed by disappointment over the delay.
TTWO Technical Analysis
Overall Assessment: TTWO has demonstrated mixed performance, delivering modest short-term gains but underperforming the broader market significantly over the past three months.
Short-term Performance: While the stock has gained 2.1% over the past month, its -3.58% decline over three months substantially lags the market's performance, evidenced by a -6.95% relative strength. This suggests recent momentum is insufficient to overcome earlier weakness relative to market benchmarks.
Current Position: TTWO's current price of $247.49 is positioned near the midpoint (approximately 53%) of its 52-week range ($178.65 to $264.79), indicating it is neither technically overbought nor oversold. Given its beta just below 1.0, recent weakness appears more stock-specific than driven by broad market volatility.
| Period | TTWO Return | S&P 500 |
|---|---|---|
| 1m | +1.2% | +0.9% |
| 3m | -3.0% | +5.3% |
| 6m | +0.9% | +10.2% |
| 1y | +35.7% | +18.1% |
| ytd | -2.9% | +0.7% |
TTWO Fundamental Analysis
Revenue & Profitability TTWO's Q2 revenue grew 18% quarter-over-quarter to $1.77 billion, suggesting solid top-line momentum. However, profitability deteriorated significantly as the company swung to an operating loss of $98 million from a $21.6 million profit in Q1, reflecting escalating marketing and development costs that outpaced revenue growth. The net profit margin fell to -7.5%, indicating current operations are not generating sustainable earnings.
Financial Health The company maintains moderate leverage with a debt-to-equity ratio of 1.02 and debt ratio of 34.8%, suggesting manageable debt levels relative to equity. Cash flow coverage ratios appear weak with cash flow to debt at just 3.7%, though the current ratio of 1.15 indicates sufficient short-term liquidity. Interest coverage remains negative at -5.6x due to operating losses, creating some concern about debt servicing capacity.
Operational Efficiency Operational metrics show challenges with negative returns on assets (-1.3%) and equity (-3.9%), reflecting inefficient capital deployment during this investment phase. Asset turnover of 0.18 indicates relatively low revenue generation from the asset base, though the 39-day cash conversion cycle demonstrates reasonable working capital management. These efficiency metrics suggest the company is prioritizing growth investments over current returns.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Level
TTWO's valuation metrics indicate significant financial distress and substantial overvaluation. With a negative trailing PE ratio (-10.86) and a deeply negative forward PE ratio (-89.05), the company is reporting substantial losses, making traditional earnings-based valuation unreliable. The elevated PB ratio of 13.33 and PS ratio of 7.35 suggest investors are pricing the stock at a significant premium to its book value and sales, which is difficult to justify given the lack of profitability. The extremely high EV/EBITDA ratio of approximately 419.9 further confirms that the company's enterprise value is vastly disproportionate to its operational earnings, signaling severe overvaluation.
Peer Comparison
A direct comparison using industry averages is not possible due to the lack of provided data. However, the core issue remains that TTWO's negative earnings and exorbitantly high EV/EBITDA ratio are strong indicators of overvaluation, irrespective of the broader industry context. Without profitable operations, the lofty price multiples relative to sales and book value lack a fundamental foundation, suggesting the stock is likely overvalued compared to profitable peers in the software/entertainment sector.
Investment Risk Disclosure
Based on the provided data, TTWO's volatility risk appears moderate. Its beta of 0.925 indicates its price moves are slightly less volatile than the broader market. The 1-year maximum drawdown of -11.55% is relatively contained, suggesting the stock has historically experienced modest peak-to-trough declines.
Other risks appear limited, with the notable absence of significant short interest implying a lack of concerted negative sentiment from traders. This lower speculative pressure, combined with the stock's large-cap status, generally points to reasonable liquidity. However, investors should still consider industry-specific risks such as project delays or changes in consumer gaming preferences.
FAQs
Neutral to slightly bearish for near-term investors. While TTWO beat earnings estimates and benefits from unanimous analyst "buy" ratings, the recent sharp price decline reflects a significant setback with the GTA VI delay, and the stock appears fundamentally overvalued with negative profitability. This stock is more suitable for patient, long-term growth investors who can withstand near-term volatility until major game releases materialize.
Based on the metrics provided, TTWO stock appears to be significantly overvalued. Key valuation metrics like a deeply negative PE ratio (-10.86), a very high Price-to-Book ratio (13.33), and an elevated Price-to-Sales ratio (7.35) all indicate a substantial premium to the company's current financial reality. This valuation is difficult to justify given the company's lack of profitability, evidenced by its negative profit margin and negative returns on assets and equity. Investors seem to be pricing in aggressive future growth expectations, but the current operational losses make the stock's price appear disconnected from its present fundamentals.
Based on the provided information, here are the key risks of holding TTWO stock:
1. Execution and Profitability Risk: The company's significant swing to an operating loss, despite revenue growth, indicates a core risk that heavy investments in marketing and development may not translate into future profitability. 2. Industry-Specific Operational Risk: Like all game publishers, TTWO faces the risk of project delays, cost overruns on major titles, or a sudden shift in consumer gaming preferences that could render its portfolio less appealing. 3. Weak Debt Servicing Capacity: With a negative interest coverage ratio due to operating losses, there is a heightened risk that TTWO could face financial stress if profitability does not recover to adequately cover its interest obligations.
Of course. Here is a professional forecast for Take-Two Interactive (TTWO) stock through 2026.
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TTWO Stock Forecast through 2026
Based on the pivotal catalyst of *Grand Theft Auto VI*, the forecast for TTWO is highly binary, centered on the monumental success of its launch.
1. Target Price Range: * Base Case (Successful Launch): $300 - $350. This assumes GTA VI meets commercial expectations, driving record revenue and restoring profitability, justifying the current heavy investment phase. * Bull Case (Blockbuster Success & Strong Live Service): $400+. This scenario requires GTA VI to exceed sales forecasts and establish a highly lucrative long-term live service model, significantly boosting forward earnings estimates.
2. Key Growth Drivers: * The launch and post-launch live service performance of *Grand Theft Auto VI*, arguably the most anticipated media product of the decade. * Sequential improvements in profitability as major marketing expenditures peak and normalize post-launch. * Continued strength from existing franchises (e.g., NBA 2K, Zynga's portfolio) providing a stable revenue base.
3. Main Assumptions: * GTA VI launches on schedule in Fall 2025 and achieves critical and commercial success. * The company successfully manages the transition from a period of high investment to one of revenue harvest and profit generation. * Macroeconomic conditions do not severely dampen consumer spending on premium video games.
4. Uncertainty of the Forecast: This forecast carries exceptionally high uncertainty. The entire investment thesis hinges on a single event. Any delay in GTA VI's release or failure to meet commercial expectations would likely result in a significant downward revision of these price targets, while outperformance could propel the stock even higher.