Assessing Whether Take Two Interactive Software (TTWO) Looks Undervalued After Recent Share Price Weakness

Take-Two Interactive Software (TTWO) is back on many investors’ screens after a tough stretch, with the share price showing negative returns over the past month and past 3 months despite solid recent revenue and net income growth.

See our latest analysis for Take-Two Interactive Software.

At a share price of US$195.59, Take-Two’s short term momentum has cooled, with a 30 day share price return of 20.4% and a year to date share price return showing a 22.26% decline. The 3 year total shareholder return of 77.68% reflects a much stronger longer term outcome.

If this volatility has you thinking about where growth might come from next in gaming and related tech, it could be worth checking out 34 AI infrastructure stocks as a starting list of potential AI infrastructure opportunities.

With revenue up 12.37% year on year but a net loss of US$3.96b and a value score of 2, is Take-Two quietly undervalued after recent share price weakness, or is the market already pricing in future growth?

Most Popular Narrative: 29.7% Undervalued

Compared with the last close at US$195.59, the most followed narrative suggests a fair value near US$278, which frames a sizeable valuation gap for investors to assess.

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.

Read the complete narrative.

Want to see what sits behind that confidence? The narrative leans heavily on compounding revenue growth, margin repair, and a future earnings multiple tied to premium entertainment names. Curious which specific assumptions drive that fair value gap?

Result: Fair Value of $278.23 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there is still meaningful execution risk if core franchises stumble or mobile titles cool off, which could challenge the GenAI efficiency and margin improvement narrative.

Find out about the key risks to this Take-Two Interactive Software narrative.

Another View: Revenue Multiple Sends A Different Signal

There is a twist. While the fair value work suggests TTWO is trading about 13.4% below our estimate of fair value at $225.89, the current P/S of 5.5x looks expensive versus a fair ratio of 3.9x, the US Entertainment average of 1.3x, and peer average of 4.5x. That kind of premium raises the question: is the market already paying up for much of the growth story?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Given the mix of optimism and questions around TTWO, this is a good moment to review the numbers yourself and act promptly. To see what the market is currently rewarding in this story, take a look at the 3 key rewards.

Looking for more investment ideas?

If TTWO has you thinking about what else might deserve a spot on your radar, this can be a good moment to expand your watchlist before the next move.

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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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