Is It Too Late To Consider Buying Take Two Interactive Software (TTWO) After Strong 3 Year Run
- If you are wondering whether Take-Two Interactive Software's current share price lines up with its real worth, you are not alone. This article is built to help you size up that question calmly and clearly.
- The stock has seen a 0.2% return over the last 7 days, 3.8% over 30 days, 2.0% year to date and 39.7% over the past year, with a 143.8% return over 3 years and 28.7% over 5 years, adding useful context for anyone thinking about timing and risk.
- Recent coverage around Take-Two has kept attention on its position in the gaming sector and how investors are thinking about its portfolio and pipeline over the long haul. That backdrop helps explain why the share price and expectations are so closely watched, even outside of short term trading.
- Right now, our valuation framework gives Take-Two Interactive Software a value score of 0 out of 6. In the next sections we will walk through what different valuation approaches say about that number and then finish with a way to think about value that can tie all those methods together.
Take-Two Interactive Software scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Take-Two Interactive Software Discounted Cash Flow (DCF) Analysis
The Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting the cash it might generate in the future and discounting those cash flows back to today. It is essentially asking what all those future dollars are worth in today's terms.
For Take-Two Interactive Software, the current last twelve months free cash flow is about $181.9 million. Using a 2 Stage Free Cash Flow to Equity model, analysts and extrapolated estimates project free cash flow reaching about $2.5 billion in 2030, with intermediate projections such as $127.9 million in 2026 and $1.5 billion in 2027. Simply Wall St uses analyst inputs where available, then extends the series using its own growth assumptions for later years.
When all those projected cash flows are discounted back, the model arrives at an estimated intrinsic value of about $210.28 per share. Compared with the current share price, this implies the stock is around 22.1% overvalued based on this framework.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Take-Two Interactive Software may be overvalued by 22.1%. Discover 885 undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Take-Two Interactive Software Price vs Sales
For companies where current earnings do not tell the full story, price based on revenue can be a cleaner yardstick, which is why P/S is useful here. It links what investors are paying directly to the sales the business is generating, without being skewed by short term swings in profit.
In simple terms, higher growth expectations or lower perceived risk tend to justify a higher P/S ratio. Slower growth or higher risk usually point to a lower, more conservative multiple. With Take-Two Interactive Software, the current P/S ratio is 7.63x. That sits above both the Entertainment industry average of 1.57x and a peer group average of 5.35x, suggesting the market is currently assigning a richer revenue multiple than these benchmarks.
Simply Wall St's Fair Ratio for Take-Two, at 4.59x, is its proprietary estimate of what a "normal" P/S might look like once you factor in items such as earnings growth, profit margins, industry, market cap and key risks. Because it blends these company specific traits rather than relying only on broad peer or industry comparisons, it is designed to be a more tailored reference point. Lining that up against the actual 7.63x P/S suggests the shares are trading above this Fair Ratio.
Result: OVERVALUED
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1449 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Take-Two Interactive Software Narrative
Earlier we mentioned that there is an even better way to think about valuation, and on Simply Wall St that starts with Narratives. Here you set out your story for Take-Two Interactive Software, link it to your own forecast for revenue, earnings and margins, and the platform turns that into a fair value that you can easily compare with the current price. You can see this alongside other investors' Narratives on the Community page, and watch it update automatically as new earnings or news arrive. For example, one investor might build a Narrative that supports a fair value near the higher analyst price target of about US$285, while another might anchor closer to the lower end near US$150. This gives you a clear, side by side view of how different assumptions about the same company can lead to very different decisions on whether the stock looks attractive at today's price.
Do you think there's more to the story for Take-Two Interactive Software? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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