Has Take-Two Interactive Software (TTWO)'s Pricing Grown Too Much After Recent Stock Weakness?

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Wondering whether Take-Two Interactive Software, valued at approximately US$200.63, offers fair value today or is asking too much for future potential? This article explains what the current price may imply.
The stock is down 3.8% in the last seven days and is down 0.4% in thirty days, with a decline of 20.3% this year and a decline of 6.0% over one year, while still showing a return of 69.9% over three years and 15.1% over five years.
Recent price movements come against the backdrop of continued interest from major game publishers and investor focus on how content pipelines and portfolios can support long-term value. Broader industry sentiment and changing risk expectations around growth companies in general also provide context for how the market is currently interacting with Take-Two.
On Simply Wall St’s checks, Take-Two scores 2 out of 6 for undervaluation. The article will then review traditional valuation approaches to see what they mean today, and end with a different way of thinking about value that can help tie it all together.

Take-Two Interactive Software scores only 2/6 on our valuation checks. See what other warning signs we found in the full valuation overview.

A Discounted Cash Flow or DCF model estimates what a company could be worth today by projecting its future cash flows and then discounting them back to a present value. It’s essentially a question of what the future money generated for shareholders is worth in today’s dollars.

For Take-Two Interactive Software, the model used is a 2-phase approach from free cash flow to equity. Trailing twelve-month free cash flow is approximately $470.6 million. The analyst and extrapolated projections used in the model extend to 2035, with expected 2030 free cash flow of approximately $2.53 billion, all expressed in $ and then discounted based on Simply Wall St’s assumptions.

Based on this, the DCF model arrives at an estimated intrinsic value of approximately $213.97 per share. Compared to the current share price of around $200.63, this suggests the stock is trading around 6.2% lower than the model’s estimate. This is a relatively small gap and within a reasonable margin of error for any valuation model.

Result: APPROXIMATELY CORRECT

Take-Two Interactive Software is fairly valued according to our Discounted Cash Flow (DCF), but this could change at a moment’s notice. Track the value in your watchlist or wallet and get notified when you need to take action.

TTWO discounted cash flow as of March 2026

Visit the Valuation section of our company report for more details on how we arrive at this fair value for Take-Two Interactive Software.

For companies where profits can be uneven, the P/S ratio is often a useful cross-check because it compares the value the market has for a company with the sales it generates, rather than with accounting profits.

In general, higher growth expectations and lower perceived risk can justify a higher P/S multiple. Slower growth and greater uncertainty may indicate that a lower, more conservative multiple is “normal” for a stock.

Take-Two Interactive Software currently trades at a P/S of approximately 5.66x. That’s above the entertainment industry average of 1.38x and also above the peer group average of 4.22x, suggesting investors are paying more per dollar of revenue than these benchmarks.

Simply Wall St’s Fair Ratio is a proprietary estimate of what price/earnings ratio might be appropriate given factors such as earnings growth, industry, profit margins, market capitalization and risk profile. Because it combines these company-specific drivers with industry context, it can provide a more tailored reference point than a simple industry or peer comparison.

For Take-Two, the Fair Ratio is 3.69x, which is significantly lower than the current 5.66x P/S. This suggests that the stock is pricing in a richer multiple than this framework implies.

Result: EXCESS VALUE

NasdaqGS:TTWO P/S Ratio as of March 2026

P/S ratios tell one story, but what if the real opportunities lie elsewhere? Start investing in legacies, not executives. Discover our 20 best founder-led companies.

It was mentioned earlier that there’s an even better way to understand valuation, so Narratives brings this together by letting you connect a clear story about Take-Two Interactive Software to the numbers, linking your view of future earnings, revenue and margins to a forecast and then to a fair value that you can easily compare to the current price.

Narratives are available on Simply Wall St’s Community page as an accessible tool used by millions of investors. This allows you to see, for example, one Take-Two story that assumes 26.0% revenue growth, 15.6% profit margin, and fair value of US$275.0, next to another story that assumes 11.2% revenue growth, 10.1% profit margin, and fair value of US$181.99. You can then quickly assess which story is closest to your own expectations.

Because these stories are updated as new information such as earnings, guidance, or news is added to the platform, you’ll always see a living picture of what different investors think Take-Two is worth. You can use the gap between each story’s fair value and the current stock price to decide whether this is closer to a buy, hold, or sell for your portfolio.

Do you think there is more to the story of Take-Two Interactive Software? Check out our community to see what others are saying!

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Companies discussed in this article include TTWO.

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