Take Two Interactive Software (TTWO) Narrowing Losses Test Bullish Margin Recovery Narratives

FY 2026 results set the stage for Take-Two’s next phase

Take-Two Interactive Software (TTWO) has just closed out FY 2026 with fourth quarter revenue of US$1,679.8 million and a basic EPS loss of US$0.32. Over recent quarters, the company has seen revenue range from US$1,503.8 million to US$1,773.8 million, while basic EPS has moved between a loss of US$0.07 and a loss of US$0.73. This provides a clear view of how the top line and per share losses have been tracking across the year. For investors, the latest print keeps the focus squarely on how efficiently that revenue is being converted to profit as management works to firm up margins.

See our full analysis for Take-Two Interactive Software.

With the headline numbers on the table, the next step is to see how this earnings profile lines up against the widely followed narratives around growth, profitability, and where the stock sits in its cycle.

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Losses narrow across FY 2026

• Across FY 2026, Take-Two reported revenue of US$1.5 billion to US$1.8 billion per quarter while quarterly net losses excluding extra items ranged from US$11.9 million to US$133.9 million, ending the year with a Q4 loss of US$59.5 million.
• Consensus narrative points to earnings and margins becoming more stable over time as mobile and in-game spending grow, yet the trailing twelve month net loss of US$298.2 million means that stability is still a goal rather than a current reality.
  • Analysts in the consensus data expect earnings to reach about US$1.1 billion by around 2028, compared with losses in the results set that include a US$3.7 billion loss in FY 2025 Q4.
  • That jump in earnings assumes margins move from a deeply loss-making position to 12.7% in three years, which is a big shift given the latest year still shows losses each quarter.

Consensus expectations for earnings improvement rest on a sharp margin recovery from recent losses, so results like FY 2026 give you a concrete baseline to compare against those forecasts.

📊 Read the what the Community is saying about Take-Two Interactive Software.

Premium P/S multiple needs strong execution

• The stock traded on a trailing P/S of 6.3x, compared with 1.3x for the US Entertainment industry and 3.8x for peers, while trailing twelve month revenue was US$6.7 billion and still produced a net loss of US$298.2 million.
• Bulls argue that expected revenue growth of 14.8% per year and earnings growth of 45.04% per year justify that premium, yet the current DCF fair value of US$220.29 and a share price of US$227.55 show only a small gap between modelled cash flows and what the market is paying.
  • The consensus analyst price target of US$279.51 sits above both the share price and the DCF fair value, so readers effectively have three different anchors to weigh against the same loss-making base.
  • If earnings do reach the US$1.1 billion level in the consensus data, the P/E implied by that target would still be 65.2x, which is much higher than the 39.3x figure cited for the US Entertainment industry.

High valuation multiples alongside trailing losses mean future reported margins and cash flows have to do the work of supporting the current price premium.

🐂 Take-Two Interactive Software Bull Case

Bear case leans on mobile and cost pressure

• On a trailing basis, revenue growth of 10.5% per year sat slightly below the 11.7% reference rate for the US market, while losses over the last five years increased at a reported 53.4% per year, and the stock traded just above the DCF fair value of US$220.29.
• Bears highlight weak mobile trends and high development and marketing costs as potential drags, and the historical pattern of increasing losses gives that concern some backing even as analysts forecast a turn to profitability within three years.
  • Bearish assumptions in the narrative still include revenue growth of 9.0% per year and margins lifting to 10.7% in three years, which is a meaningful shift from the trailing twelve month net loss of US$298.2 million.
  • At the same time, the discounted cash flow estimate being close to the current share price suggests limited buffer if mobile titles or big releases do not deliver the growth embedded in those projections.

The cautious view puts a lot of emphasis on whether mobile and blockbuster titles can offset rising costs quickly enough to move from years of losses to the profitability levels analysts are modelling.

🐻 Take-Two Interactive Software Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Take-Two Interactive Software on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With all these moving parts, are you feeling more optimistic or cautious about Take-Two right now? Act quickly, look through the details, and weigh both the concerns and the potential upside by checking out the 2 key rewards and 1 important warning sign

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Take-Two is still reporting sizeable losses alongside a premium P/S and ambitious margin expectations. This leaves little margin for error if those projections slip.

If you want ideas where the current price looks closer to a potential bargain than a stretch, start comparing opportunities with the 49 high quality undervalued stocks

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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