Take-Two Interactive Software, Inc. (NASDAQ:TTWO) Just Released Its Third-Quarter Results And Analysts Are Updating Their Estimates

Last week, you might have seen that Take-Two Interactive Software, Inc. (NASDAQ:TTWO) released its third-quarter result to the market. The early response was not positive, with shares down 7.2% to US$155 in the past week. Revenues of US$1.3b arrived in line with expectations, although statutory losses per share were US$0.54, an impressive 25% smaller than what broker models predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Take-Two Interactive Software

Taking into account the latest results, the current consensus from Take-Two Interactive Software's 23 analysts is for revenues of US$7.38b in 2025. This would reflect a major 37% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 88% to US$1.01. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$7.74b and losses of US$0.31 per share in 2025. So it's pretty clear the analysts have mixed opinions on Take-Two Interactive Software after this update; revenues were downgraded and per-share losses expected to increase.

The average price target was broadly unchanged at US$175, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Take-Two Interactive Software, with the most bullish analyst valuing it at US$200 and the most bearish at US$130 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Take-Two Interactive Software's growth to accelerate, with the forecast 28% annualised growth to the end of 2025 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Take-Two Interactive Software is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Take-Two Interactive Software. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that 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 2026, and you can see them free on our platform here.

Even so, be aware that Take-Two Interactive Software is showing 1 warning sign in our investment analysis , you should know about...

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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.