Last Update 19 Dec 25

Fair value Increased 0.29%

TTWO: Rising Engagement And Scarcity Value Will Drive Shares Higher

Analysts have nudged their blended price target on Take-Two Interactive slightly higher to about $277 from roughly $277 previously, reflecting increased confidence in margin expansion and long term earnings power from a revitalized NBA 2K franchise, improving mobile trends, and the sizable step up anticipated around the GTA 6 launch, despite at least one recent downgrade to Neutral.

Analyst Commentary

Recent Street research paints a broadly constructive picture on Take-Two, with upbeat calls on engagement trends and long term earnings potential tempered by some valuation and execution concerns.

Bullish Takeaways

Bullish analysts highlight a clear path to higher long term earnings, pointing to a reinvigorated NBA 2K franchise and steady mobile growth as key drivers that help raise the structural earnings floor ahead of GTA 6.
Higher price targets in the high $200s to $300 range reflect confidence that the upcoming GTA 6 release will deliver a sizable step up in profitability over the next two to three years, supporting a premium multiple versus peers.
Third party tracking data indicating record engagement levels for NBA 2K in late 2025 is seen as evidence that live service and annualized titles can sustain stronger monetization, improving visibility into recurring revenue.
The company is increasingly viewed as a scarce asset in the AAA publishing space following consolidation among competitors. Bullish analysts believe this dynamic can support valuation and potentially introduce a takeout premium over time.

Bearish Takeaways

Bearish analysts argue that the stock already discounts a significant portion of the GTA 6 upside, which limits near term risk reward and justifies more neutral ratings despite positive long term fundamentals.
Some caution that FY26 remains a transition year, with elevated investment ahead of launch and limited room for execution missteps on timing, quality, or live service strategy that could pressure margins and sentiment.
There is concern that a well financed competitor base, including publishers backed by large strategic or sovereign investors, could intensify content and marketing spend, raising the bar for returns on Take-Two's development pipeline.
A lack of expected new GTA related updates for several months is viewed as a potential overhang, as periods without catalysts may expose the stock to multiple compression if broader market risk appetite fades.

What's in the News

Rockstar's 2010 hit "Red Dead Redemption" is slated to launch on mobile and Netflix's gaming platform on December 4, 2025, with new listings also pointing to PlayStation 5, Xbox Series X/S, and Nintendo Switch 2 versions (The Verge).
"Grand Theft Auto V" and "Red Dead Redemption 2" continue to chart in the European top ten weekly sales rankings, underscoring the durability of Rockstar's back catalog alongside new releases from rival publishers (The Game Business).
Rockstar Games is facing union busting allegations after firing 30 to 40 workers in the U.K. and Canada, with a British trade union claiming the terminations targeted staff involved in organizing efforts, while Take-Two maintains they were dismissed for gross misconduct (Bloomberg).

Valuation Changes

Fair Value Estimate has risen slightly to about $277.40 from roughly $276.59, reflecting modestly higher confidence in long term earnings power.
Discount Rate has inched up to approximately 9.20 percent from about 9.20 percent previously, a negligible change that leaves the risk profile effectively unchanged.
Revenue Growth Assumption has edged down slightly to around 15.08 percent from roughly 15.17 percent, indicating a marginally more conservative top line outlook.
Net Profit Margin has increased modestly to about 13.24 percent from roughly 12.92 percent, signaling improved expectations for profitability and operating efficiency.
Future P/E Multiple has declined slightly to about 61.0x from roughly 62.2x, implying a small contraction in the valuation multiple applied to forward earnings.

Growth in mobile and in-game content, supported by direct distribution and regulatory shifts, is strengthening margins and stabilizing earnings.
Expansion to new platforms and major franchise releases are set to drive audience growth and future profitability.
High dependence on major franchises, rising costs, shifting gamer behavior, and increased competition threaten revenue stability, margin growth, and long-term market relevance.

Catalysts

About Take-Two Interactive Software

Develops, publishes, and markets interactive entertainment solutions for consumers worldwide.What are the underlying business or industry changes driving this perspective?

Take-Two's mobile portfolio is experiencing outsized growth through direct-to-consumer initiatives, enhanced personalization, new event-driven features, and benefits from broader access provided by high-speed internet and mobile penetration, likely lifting both net revenue and margins as distribution costs decline.
The company's ability to drive double-digit growth in recurrent consumer spending-now a dominant share of net bookings-through expanding premium in-game content (e.g., NBA 2K and GTA Online), positions earnings and margins to become less cyclical and more stable over time.
Take-Two is capitalizing on the expanding global gaming market and demographic shifts by launching key franchises on new platforms (e.g., Nintendo Switch 2, mobile, Meta Quest VR), broadening the addressable audience and supporting future topline growth.
Recent and pending changes in app store regulations and court rulings are opening new, lower-cost digital distribution channels that increase Take-Two's ability to capture a higher share of revenue from mobile and in-game purchases, improving long-term margin prospects.
Strategic investments in technology, AI, and content pipeline efficiency, alongside a strong release slate with multiple high-profile launches (including Borderlands 4, NBA 2K26, and Mafia: The Old Country), undergird management's outlook for record net bookings and enhanced profitability in the coming years.

Take-Two Interactive Software Earnings and Revenue Growth

Take-Two Interactive Software Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Take-Two Interactive Software's revenue will grow by 14.8% annually over the next 3 years.
Analysts assume that profit margins will increase from -72.9% today to 12.7% in 3 years time.
Analysts expect earnings to reach $1.1 billion (and earnings per share of $6.01) by about September 2028, up from $-4.2 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.5 billion in earnings, and the most bearish expecting $727 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 65.2x on those 2028 earnings, up from -10.8x today. This future PE is greater than the current PE for the US Entertainment industry at 39.3x.
Analysts expect the number of shares outstanding to grow by 5.03% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.21%, as per the Simply Wall St company report.

Take-Two Interactive Software Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Overreliance on key franchises such as Grand Theft Auto, NBA 2K, and Borderlands creates significant revenue cyclicality and earnings risk if blockbuster releases underperform, face delays, or lose player engagement, which could drive volatility in top-line revenue and net margins.
The company expects moderation in Mobile growth due to the maturity of major titles and industry-wide lifecycle curves for hyper-casual and hybrid-casual games, indicating potential stagnation or contraction in a critical revenue stream that currently contributes heavily to net bookings and operating profits.
Rising development costs, longer development cycles, and increased personnel and marketing spend-evidenced by higher than forecast operating expenses-present ongoing risks to profitability and margin expansion, especially if future titles do not achieve anticipated commercial or critical success.
Shifting digital consumption habits, such as the potential movement of gamers toward new platforms like short-form, social, or UGC-driven environments (e.g., Roblox, VR/AR), may erode the addressable audience for Take-Two's premium console/PC-focused titles, impacting future revenue growth and market share.
Intensifying competition and platform fragmentation (new storefronts, subscription models, and evolving distribution channels) may weaken publisher leverage, force price competition, and limit Take-Two's ability to sustain or grow traditional game sales, thereby pressuring both revenue streams and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $262.022 for Take-Two Interactive Software based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $285.0, and the most bearish reporting a price target of just $150.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $8.8 billion, earnings will come to $1.1 billion, and it would be trading on a PE ratio of 65.2x, assuming you use a discount rate of 9.2%.
Given the current share price of $247.86, the analyst price target of $262.02 is 5.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Weigh Optimism and Risks as Take-Two Interactive Adjusts Valuation on Game Pipeline News