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Take-Two Interactive (TTWO)
NASDAQ:TTWO
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Take-Two
(NASDAQ:TTWO)
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Rating:57Neutral
Price Target:
$220.00
▲(2.86% Upside)
Action:ReiteratedDate:02/04/26
The score is held back primarily by very weak profitability despite improving cash generation and manageable leverage. A strong earnings update with raised net bookings and improved operating cash flow outlook provides meaningful support, but technicals remain bearish with the stock below major moving averages and negative momentum, and valuation is constrained by losses and the lack of dividend yield.
Positive Factors
High recurring consumer spending
A large and growing share of net bookings from recurrent consumer spending (≈78% guidance) improves revenue predictability and monetization durability. Steady in‑game spending across live services reduces reliance on new releases and supports multi‑period cash flow generation.
Deep franchise portfolio and release pipeline
Ownership of global franchises across console, mobile and live services provides durable competitive advantage and diversified revenue streams. A broad pipeline (mobile and AAA) spreads execution risk and supports long‑term player engagement and licensing/monetization opportunities.
Improved and positive cash generation
Material improvement to operating and free cash flow strengthens financial flexibility. Positive FCF supports reinvestment in live services, mobile growth and pipeline funding, while providing a buffer to service moderate leverage and fund marketing for major titles.
Negative Factors
Deeply negative operating and net margins
Severely negative margins indicate that operating costs, non‑cash charges or one‑off items are overwhelming gross profit, limiting the company’s ability to convert revenue into sustainable earnings. This constrains long‑term returns and investment capacity despite healthy gross margins.
Reliance on a single major future release (GTA VI)
Concentration risk around a blockbuster release creates execution and timing vulnerability; delays or weaker monetization would materially impact forward bookings and multi‑year forecasts. Dependence on one title amplifies business risk relative to more evenly distributed release schedules.
Moderate leverage with very weak returns
While leverage has improved, the company still carries meaningful debt against equity and posts sharply negative returns on equity. This combination limits strategic flexibility, increases sensitivity to cash flow volatility, and could constrain financing or M&A options if profitability does not recover.
Take-Two (TTWO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.61B
Dividend YieldN/A
Average Volume (3M)2.73M
Price to Earnings (P/E)―
Beta (1Y)0.79
Revenue Growth13.98%
EPS Growth-6.71%
CountryUS
Employees12,371
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)1.23
Shares Outstanding185,175,460
10 Day Avg. Volume1,893,321
30 Day Avg. Volume2,726,949
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)16.98
Price to Sales (P/S)6.44
P/FCF Ratio-169.10
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue6.40
Enterprise Value/Gross Profit11.59
Enterprise Value/Ebitda-15.34
Forecast
1Y Price Target
$288.41Price Target Upside34.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering17
EPS Forecast (FY)3.86
Revenue Forecast (FY)$6.66B
Take-Two Business Overview & Revenue Model
Company DescriptionTake-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games, 2K, Private Division, and T2 Mobile Games names. It develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Redemption names; and offers episodes and content, as well as develops brands in other genres, including the LA Noire, Bully, and Manhunt franchises. The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports, and family/casual entertainment under the BioShock, Mafia, Sid Meier's Civilization, XCOM series, and Borderlands. In addition, it publishes sports simulation titles comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; and PGA TOUR 2K. Further, the company offers Kerbal Space Program, OlliOlli World, and The Outer Worlds and Ancestors: the Humankind Odyssey under Private Division; and free-to-play mobile games, such as Dragon City, Monster Legends, Two Dots, and Top Eleven. Its products are designed for console gaming systems, including PlayStation 4 and PlayStation 5; Xbox One; the Nintendo's Switch; personal computers; and mobile comprising smartphones and tablets. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services. Take-Two Interactive Software, Inc. was incorporated in 1993 and is based in New York, New York.
How the Company Makes MoneyTake-Two generates revenue primarily through the sale of video game software, which includes both physical and digital copies of its games. The company also earns significant income from downloadable content (DLC) and microtransactions, especially in its popular online multiplayer games. Additionally, Take-Two benefits from recurring revenue through its subscription services and in-game purchases. The company has established strong partnerships with console manufacturers, such as Sony and Microsoft, which help in promoting their titles on platforms like PlayStation and Xbox. Furthermore, Take-Two invests in mobile gaming, enhancing its revenue through the acquisition of companies like Social Point, and leveraging the growing mobile gaming market. The success of its franchises and ongoing engagement with players through online services and community events are critical factors contributing to its earnings.
Take-Two Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyTake-Two Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Positive
The call presented strong, broad-based operational momentum: a sizable Q3 beat on net bookings, double-digit revenue growth, robust recurring consumer spending, exceptional performance from NBA 2K, GTA and multiple mobile titles, and a raised operating cash flow outlook. Management highlighted continued mobile DTC progress, AI adoption, and a deep product pipeline culminating in GTA VI. Headwinds are modest in comparison — a slightly conservative Q4 guide vs last year, near-term margin pressures from rising cost of revenue and expenses, market concern over AI affecting stock sentiment, and reliance on the upcoming blockbuster release. Taken together, the positive results, upgraded guidance, and clear execution across labels significantly outweigh the listed lowlights.Q3-2026 Updates
Positive Updates
Quarterly Net Bookings Beat and Raised Full-Year Outlook
Q3 net bookings of $1.76B meaningfully exceeded guidance ($1.55B–$1.6B). Management raised full-year net bookings guidance to $6.65B–$6.7B (Strauss earlier referenced up to $7.0B), implying ~18% growth year-over-year at the midpoint and ~ $725M above the initial outlook referenced earlier in the call.
Strong Recurring Consumer Spending
Recurring consumer spending rose 23% in the quarter, accounted for 76% of net bookings in Q3, and is now forecasted to grow ~17% for the full year and represent ~78% of net bookings.
NBA 2K Franchise Outperformance
NBA 2K sold approximately 8 million units to date (a high single-digit percentage increase vs NBA 2K25). Recurrent consumer spending, daily active users and MyCareer DAUs each grew ~30% YoY. Management forecasts NBA 2K recurrent consumer spending growth of ~37% for the full year.
Grand Theft Auto Momentum
GTA Online recurrent consumer spending grew 27% YoY. Grand Theft Auto V has sold over 225 million units since launch and GTA Plus membership levels nearly doubled YoY, demonstrating sustained engagement ahead of GTA VI.
Mobile Business Strength (Zynga)
Mobile net bookings rose ~19% YoY. TuneBlast grew 43% YoY and surpassed $3B in lifetime net bookings. Match Factory grew ~17% YoY; Empires & Puzzles and other titles contributed materially. Mobile direct-to-consumer had its strongest quarter on record and mobile advertising revenue grew ~10% YoY.
Revenue Growth and Improved Cash Flow Outlook
GAAP net revenue increased 25% to $1.7B in the quarter. Management raised operating cash flow forecast to $450M (up from prior $250M) and expects to deploy ~ $180M in capital expenditures.
Favorable Label Mix and Pipeline
Management projects net bookings mix roughly 46% Zynga, 38% 2K, and 16% Rockstar. A robust release pipeline (WWE 2K26, Civilization VII mobile, PGA Tour 2K25 on Switch 2 and the upcoming Grand Theft Auto VI with marketing starting summer and release on Nov 19, 2026) supports forward growth expectations.
Operating Leverage Despite Investment
Q3 GAAP operating expenses increased 10% to $984M (management basis +13% YoY), yet management expects full-year management operating expense growth of ~8% (and Q4 management op expense growth ~3%), signaling operating expense leverage versus strong top-line expansion.
Negative Updates
Q4 Net Bookings Guidance Slightly Below Prior Year
Q4 net bookings guidance of $1.51B–$1.56B compares to $1.58B in the prior year, implying a slight year-over-year decrease at the midpoint for the quarter.
Q4 Recurrent Consumer Spending Moderation
Management projects Q4 recurrent consumer spending to increase only ~7% (versus +23% in Q3), with an assumed modest decline for Grand Theft Auto Online in the quarter and only mid-single-digit growth for mobile.
Rising Cost of Revenue and Expenses
Cost of revenue rose 26% to $754M in Q3, slightly outpacing revenue growth (GAAP revenue +25%); GAAP operating expenses were up 10% YoY and management op expenses were +13% YoY in Q3, indicating some near-term margin pressure even as management highlights leverage.
Investor Concerns About AI and Market Reaction
Equity markets recently punished the stock and peers over AI concerns. Management addressed the issue and emphasized adoption of generative AI, but market skepticism remains an external headwind to investor sentiment.
Dependence on Major Future Release (GTA VI)
A sizable portion of forward optimism and FY2027 expectations hinge on the successful launch and monetization of Grand Theft Auto VI (marketing starting summer, release Nov 19, 2026), creating execution and timing risk should delays or weaker-than-expected outcomes occur.
Guidance Messaging Ambiguity
There was inconsistency in commentary: Strauss referenced a full-year net bookings range up to $7.0B while the CFO later stated $6.65B–$6.7B. Such inconsistencies can create short-term investor confusion about the precise outlook.
Company Guidance
Take-Two raised its outlook after a strong Q3: net bookings were $1.76 billion (well above guidance of $1.55–$1.60B), and the company now expects FY26 net bookings of roughly $6.65–$7.00 billion (about 18% growth at the midpoint and ~ $725M above the May outlook); Q4 net bookings are guided to $1.51–$1.56B (vs $1.58B LY). Recurrent consumer spending is expected to grow ~17% for the year and represent ~78% of net bookings (Q3 RCS rose 23% and was 76% of net bookings; Q4 RCS is guided to ~+7% with NBA 2K driving a high‑teens/low‑20s uplift in Q4, mobile mid‑single digits, and a modest decline in GTA Online). FY GAAP net revenue is guided to $6.55–$6.60B, FY cost of revenue $2.78–$2.80B, and FY operating expenses $3.96–$3.97B (management opex growth ~8%); operating cash flow forecast was raised to $450M (from $250M), capex remains ~ $180M. Q3 GAAP net revenue was $1.7B (+25%), cost of revenue $754M (+26%), and operating expenses $984M (+10%); management‑basis opex showed leverage versus top‑line growth. Net bookings by label are projected ~46% Zynga, 38% 2K, and 16% Rockstar.Take-Two Financial Statement Overview
Summary
Mixed fundamentals: revenue is up (~5.5%) and free cash flow is positive (~$488M) with improved operating cash flow (~$668M), but profitability is the major weakness with deeply negative margins (net and EBIT about -64%). Balance sheet leverage is moderate in TTM terms (debt-to-equity ~1.0), yet returns are sharply negative due to large losses.Income Statement
TTM (Trailing-Twelve-Months) revenue is up (~5.5%), but profitability is deeply negative: net margin is about -64% and operating profitability is also meaningfully negative (EBIT margin ~-64%, EBITDA margin ~-44%). Results have deteriorated versus FY2023 and the company is far from the FY2021–FY2022 period when it generated positive operating profit and net income. Gross margin remains solid (~56%), but heavy operating costs and charges are overwhelming the revenue base.22
Negative
Balance Sheet
Leverage is moderate in TTM terms (debt-to-equity ~1.0 with ~$1.0B of debt and ~$3.5B of equity), improved from the most recent annual period where leverage was higher (~1.9). However, returns are very weak due to large losses (TTM return on equity is sharply negative), which limits balance-sheet strength despite a sizable asset base. The trajectory shows a company that has taken on more leverage versus earlier years, while profitability has moved materially lower.45
Neutral
Cash Flow
Cash generation improved materially in TTM (operating cash flow ~$668M and free cash flow ~$488M) versus the prior annual period where both were negative. Free cash flow growth is very strong (reported ~154%), indicating better cash discipline and/or working-capital tailwinds. The key concern is quality of earnings: the company is reporting large net losses while still producing positive free cash flow, suggesting results are being pressured by non-cash items and/or timing effects that may not persist.58
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.56B | 5.63B | 5.35B | 5.35B | 3.50B | 3.37B |
| Gross Profit | 3.63B | 3.06B | 2.24B | 2.29B | 1.97B | 1.84B |
| EBITDA | -2.74B | -2.98B | -1.80B | 582.50M | 747.00M | 890.80M |
| Net Income | -3.96B | -4.48B | -3.74B | -1.12B | 418.00M | 588.90M |
Balance Sheet | ||||||
| Total Assets | 10.01B | 9.18B | 12.22B | 15.86B | 6.55B | 6.03B |
| Cash, Cash Equivalents and Short-Term Investments | 2.37B | 1.47B | 776.00M | 1.01B | 2.55B | 2.73B |
| Total Debt | 3.88B | 4.11B | 3.53B | 3.49B | 250.20M | 191.27M |
| Total Liabilities | 6.51B | 7.04B | 6.55B | 6.82B | 2.74B | 2.70B |
| Stockholders Equity | 3.50B | 2.14B | 5.67B | 9.04B | 3.81B | 3.33B |
Cash Flow | ||||||
| Free Cash Flow | 487.80M | -214.60M | -157.80M | -203.10M | 99.34M | 843.39M |
| Operating Cash Flow | 667.90M | -45.20M | -16.10M | 1.10M | 257.98M | 912.32M |
| Investing Cash Flow | -421.60M | -151.50M | -28.20M | -2.88B | 139.22M | -806.72M |
| Financing Cash Flow | 666.90M | 650.50M | -91.40M | 1.93B | -256.81M | -57.34M |
Take-Two Technical Analysis
Neutral
213.88
Price Trends
229.72
Negative
239.05
Negative
237.73
Negative
Market Momentum
-5.61
Negative
50.59
Neutral
91.91
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTWO, the sentiment is Neutral. The current price of 213.88 is above the 20-day moving average (MA) of 203.35, below the 50-day MA of 229.72, and below the 200-day MA of 237.73, indicating a neutral trend. The MACD of -5.61 indicates Negative momentum. The RSI at 50.59 is Neutral, neither overbought nor oversold. The STOCH value of 91.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TTWO.
Take-Two Risk Analysis
Take-Two disclosed 48 risk factors in its most recent earnings report. Take-Two reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Take-Two Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $69.62B | 15.77 | 22.36% | 2.19% | 5.69% | 32.87% | |
70 Outperform | $50.32B | 75.30 | 10.03% | 0.37% | -1.45% | -11.99% | |
65 Neutral | $11.36B | 106.16 | 5.30% | ― | 16.84% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
57 Neutral | $39.61B | -9.56 | -86.22% | ― | 13.98% | -6.71% | |
57 Neutral | $47.80B | -43.75 | -345.84% | ― | 32.70% | 12.57% | |
52 Neutral | $1.05B | -5.09 | ― | 9.98% | 7.49% | -60.32% |
* Communication Services Sector Average
TTWO
Take-Two
213.88
5.33
2.56%
EA
Electronic Arts
201.06
69.80
53.18%
NTES
NetEase
115.19
17.13
17.47%
BILI
Bilibili
27.23
6.29
30.04%
PLTK
Playtika Holding
2.78
-1.88
-40.28%
RBLX
Roblox
67.44
4.78
7.63%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.