Take-Two Interactive Software, Inc. (NASDAQ:TTWO) Analysts Just Slashed This Year's Revenue Estimates By 19%

Today is shaping up negative for Take-Two Interactive Software, Inc. (NASDAQ:TTWO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 4.3% to US$152 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the 23 analysts covering Take-Two Interactive Software are now predicting revenues of US$5.7b in 2025. If met, this would reflect a reasonable 6.4% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 86% to US$3.16. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$7.0b and losses of US$1.23 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Take-Two Interactive Software

There was no major change to the consensus price target of US$176, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Take-Two Interactive Software's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Take-Two Interactive Software's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Take-Two Interactive Software is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Take-Two Interactive Software. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Take-Two Interactive Software's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Take-Two Interactive Software going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Take-Two Interactive Software analysts - going out to 2027, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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