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Take-Two (TTWO)
NASDAQ:TTWO
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Take-Two
(NASDAQ:TTWO)62Neutral
Positive Factors
Earnings
TTWO can achieve record Net Bookings in the coming years as it releases some of its highly anticipated titles: Grand Theft Auto 6, Borderlands 4, Mafia: The Old Country, and Judas.
Market Position
Take-Two Interactive is a leading e-sport games player with a robust pipeline, indicating strong future growth potential.
Negative Factors
Sales
The current release line-up could result in some sales cannibalization or delays, which may pressure the stock in the near-term.
Take-Two (TTWO) vs. S&P 500 (SPY)
Market Cap
$36.72B
Dividend YieldN/A
Average Volume (3M)1.91M
Price to Earnings (P/E)―
Beta (1Y)0.91
Revenue Growth1.00%
EPS Growth-148.89%
CountryUS
Employees12,371
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)-21.33
Shares Outstanding176,495,710
10 Day Avg. Volume1,594,811
30 Day Avg. Volume1,914,185
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.74
Price to Cash Flow (P/CF)-1912.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$223.15Price Target Upside7.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
Take-Two Business Overview & Revenue Model
Company DescriptionTake-Two Interactive Software, Inc. is a leading developer, publisher, and marketer of interactive entertainment for consumers around the world. The company operates through two primary labels, Rockstar Games and 2K, which are renowned for creating popular video game franchises such as Grand Theft Auto, NBA 2K, and Borderlands. Take-Two is headquartered in New York City and engages in the production and distribution of games for console, PC, and mobile platforms, offering both physical and digital formats.
How the Company Makes MoneyTake-Two generates revenue through the sale of its video game products across various platforms, including console, PC, and mobile. The company employs a diverse revenue model that includes both the sale of physical game copies and digital downloads. In addition to direct sales, Take-Two earns money from in-game purchases, downloadable content (DLC), and microtransactions, which are prevalent in its popular titles like Grand Theft Auto Online and NBA 2K. Recurring consumer spending on virtual currency, add-on content, and other in-game items forms a significant portion of its revenue stream. Furthermore, the company benefits from licensing and merchandise sales related to its game franchises. Strategic partnerships and collaborations, such as those with sports leagues for its NBA 2K series, also play a role in enhancing its market presence and revenue opportunities.
Take-Two Financial Statement Overview
Summary
Take-Two's financial performance is challenged by negative profitability and cash flow trends, despite a relatively stable balance sheet. The income statement reflects significant losses with a negative net profit margin and stagnant revenue growth. Cash flow analysis highlights liquidity issues with negative free cash flow. This indicates critical areas needing improvement.Income Statement
Take-Two's income statement shows significant financial challenges, with a notable decline in profitability. The TTM (Trailing-Twelve-Months) reflects a negative net profit margin of approximately -67.1%, indicating substantial losses. Revenue growth has been stagnant, with only a slight increase from the previous year, which is concerning given the competitive industry. Both EBIT and EBITDA margins are negative, further highlighting operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet indicates a moderate financial position with a reasonable debt-to-equity ratio of approximately 0.18, suggesting manageable leverage. However, the decline in stockholders' equity over time points to potential challenges in value retention. The equity ratio stands at 45% for the TTM, indicating a stable asset base funded by equity. While there is some resilience, the overall decline in assets and equity over recent periods is a concern.60
Neutral
Cash Flow
Cash flow analysis reveals liquidity issues, with negative free cash flow in the TTM, reflecting cash outflows exceeding inflows. The operating cash flow to net income ratio is negative, which is troubling as it indicates operational cash deficits. The free cash flow growth rate is negative, underscoring a downward cash flow trend, which could hinder future investments and operations.50
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.45B | 5.35B | 5.35B | 3.50B | 3.37B | 3.09B | Gross Profit |
| 2.85B | 2.24B | 2.29B | 1.97B | 1.84B | 1.55B | EBIT |
| -318.90M | -3.59B | -1.13B | 473.60M | 629.38M | 425.27M | EBITDA |
| -1.78B | -1.80B | 656.80M | 690.56M | 876.29M | 697.62M | Net Income Common Stockholders |
| -3.66B | -3.74B | -1.12B | 418.00M | 588.90M | 404.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 776.00M | 776.00M | 1.01B | 2.55B | 2.73B | 2.00B | Total Assets |
| 12.22B | 12.22B | 15.86B | 6.55B | 6.03B | 4.95B | Total Debt |
| 3.53B | 3.53B | 3.49B | 250.22M | 191.27M | 177.25M | Net Debt |
| 2.78B | 2.78B | 2.66B | -1.48B | -1.23B | -1.18B | Total Liabilities |
| 6.55B | 6.55B | 6.82B | 2.74B | 2.70B | 2.41B | Stockholders Equity |
| 5.67B | 5.67B | 9.04B | 3.81B | 3.33B | 2.54B |
| Cash Flow | Free Cash Flow | ||||
| -494.60M | -157.80M | -203.10M | 99.34M | 843.39M | 632.29M | Operating Cash Flow |
| -333.10M | -16.10M | 1.10M | 257.98M | 912.32M | 685.68M | Investing Cash Flow |
| -143.40M | -28.20M | -2.88B | 139.22M | -806.72M | 4.05M | Financing Cash Flow |
| 608.80M | -91.40M | 1.93B | -256.81M | -57.34M | -77.45M |
Take-Two Technical Analysis
Positive
208.55
Price Trends
193.53
Positive
183.67
Positive
168.53
Positive
Market Momentum
5.02
Positive
57.36
Neutral
35.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTWO, the sentiment is Positive. The current price of 208.55 is above the 20-day moving average (MA) of 206.75, above the 50-day MA of 193.53, and above the 200-day MA of 168.53, indicating a bullish trend. The MACD of 5.02 indicates Positive momentum. The RSI at 57.36 is Neutral, neither overbought nor oversold. The STOCH value of 35.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.89T | 31.30 | 30.64% | 0.81% | 15.04% | 12.38% | |
66 Neutral | $33.68B | 32.88 | 14.15% | 0.59% | -2.99% | -0.46% | |
62 Neutral | $36.72B | ― | -64.11% | ― | 1.00% | -148.89% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
53 Neutral | $1.69B | ― | 8.41% | ― | 13.26% | 83.01% |
* Communication Services Sector Average
Performance Comparison
TTWO
Take-Two
208.55
64.65
44.93%
EA
Electronic Arts
131.82
-2.98
-2.21%
MSFT
Microsoft
388.61
-10.43
-2.61%
UBSFY
UBISOFT Entertainment
2.56
-1.87
-42.21%
Take-Two Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 13.91% | Next Earnings Date: May 19, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in key segments such as NBA 2K and the promising outlook with upcoming major game releases. However, concerns were raised regarding challenges in the mobile market and the impact of shifting operating expenses. Overall, the sentiment is positive due to the anticipated releases and strong position in core gaming franchises.Highlights
Strong Performance of NBA 2K
NBA 2K delivered a phenomenal quarter with recurrent consumer spending up over 30%, daily active users up nearly 20%, and monthly active users up nearly 10%. The title sold over 7 million units and exceeded expectations significantly.
Launch of Major Titles
This year is set to see the launch of major titles including Sid Meier's Civilization VII, Mafia: The Old Country, Grand Theft Auto VI, and Borderlands 4, which is expected to have a transformative effect on the business.
Record Franchise Performance
Grand Theft Auto V has sold over 210 million units worldwide. GTA Online continues to perform well with membership growth for GTA Plus increasing 10% year-over-year.
Positive Outlook for Future Fiscal Years
The company is confident in achieving record levels of net bookings in fiscal 2026 and 2027.
Expansion in Mobile Sector
Zynga's Match Factory is on track to become its second-largest title by the end of this fiscal year. Tune Blast and Toy Blast delivered double-digit growth.
Lowlights
Mobile Market Challenges
Mobile growth was below expectations with only 6% increase instead of the low double-digit growth forecasted, primarily due to underperformance in the hyper-casual mobile portfolio and Empires and Puzzles.
Shift in Operating Expenses
A shift in timing of expenses from the third to the fourth quarter is expected to affect fourth-quarter performance.
Company Guidance
During the Take-Two Interactive Software, Inc. third quarter fiscal year 2025 earnings call, the company highlighted several key metrics and forward-looking guidance. The company reported net bookings of $1.37 billion, within their guidance range of $1.35 to $1.4 billion, driven by strong performance in the NBA 2K franchise, which saw over 7 million units sold and a 30% increase in recurrent consumer spending. For fiscal 2025, the company reaffirmed their net bookings guidance of $5.55 to $5.65 billion, projecting a 5% growth over the previous year. NBA 2K, Grand Theft Auto series, and several mobile titles are anticipated to be the largest contributors. Recurrent consumer spending is expected to grow by 5%, while mobile is expected to see low single-digit growth. They also noted upcoming releases, including Grand Theft Auto VI and Borderlands 4, which are anticipated to drive record levels of net bookings in fiscal 2026 and 2027. The call also revealed a geographic net bookings split of 60% U.S. and 40% international, with a breakdown by labels of 49% Zynga, 34% 2K, and 17% Rockstar Games.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.