32/100Is TTWO-Take-Two Interactive Software, a buy?
Monday 31 August 2026
Why now: The stock is trading at $220.12 today, down about 6.5% versus the prior close, which can reset expectations after recent leak-driven volatility. The long-term question is still the same: whether the next Grand Theft Auto launch and the following online monetization cycle translate into durable cash flow rather than a one-time spike.
Upside: Street consensus target is $291.30, implying about 23.8% upside from the last trade, but the real upside path depends on a clean launch window and clear evidence of post-launch recurring spending. If the launch timeline holds and early engagement is strong, investor focus can shift from “event risk” to multi-quarter cash generation.
Risks: The biggest risk is a delay or a launch that disappoints on quality or performance, which would hit both near-term results and trust in the release calendar. A second risk is that profitability and free cash flow do not scale enough to justify the current valuation, especially with a history of share dilution.
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Scorecard
| Scorecard | 32/100 | |
|---|---|---|
| Company Detail | TTWO - Take-Two Interactive Software, Inc. | |
| Price as at 31 August 2026 | $220.12 | |
| Market cap | $44.0B | |
| Quality and Fundamental Score (100) | ||
| Breakout / Early-Momentum /20 | 0/20 | |
| Rev/EPS Momentum /20 | 0/20 | |
| Business Quality /15 | 11/15 | |
| Balance Sheet /15 | 3/15 | |
| Valuation /10 | 4/10 | |
| Industry Relative Strength /10 | 4/10 | |
| Macro / Sector Tailwind /10 | 10/10 | |
| Growth | ||
| Cash runway | Cash generative | |
| Revenue YoY | +18.2% | |
| EPS YoY | +93.7% | |
| FCF YoY | +315.1% | |
| Gross margin | 57.2% | |
| Valuation & Trend | ||
| Trailing P/E | neg | |
| Forward P/E | 33.9x | |
| RSI (14d) | 34 | |
| vs 50d SMA | -8.9% | |
| Support cushion | −6.2% | |
| Sentiment | ||
| Wall Street verdict | Aligned | |
| News tone | Quiet | |
| Dividend | — | |
How are these colored?
| Metric | Strong metrics | Solid metrics | Selective | Caution | Unfavourable |
|---|---|---|---|---|---|
| Overall score | ≥ 80 | 70-79 | 60-69 | 50-59 | < 50 |
| Business quality /15 | ≥ 12 | 10-11 | 8-9 | 6-7 | < 6 |
| Balance sheet /15 | ≥ 12 | 10-11 | 8-9 | 6-7 | < 6 |
| Market cap | ≥ $20B | $5B-$20B | $2B-$5B | $1B-$2B | < $1B |
| Cash runway | ≥ 3 yr or cash generative | 1.5-3 yr | 0.75-1.5 yr | 0.25-0.75 yr | < 0.25 yr |
| Revenue YoY | ≥ 15% | 5-15% | 0-5% | -5-0% | < -5% |
| EPS YoY | ≥ 20% | 5-20% | 0-5% | -5-0% | < -5% |
| FCF YoY | ≥ 10% | 1-10% | 0-1% | -5-0% | < -5% |
| Gross margin | ≥ 60% | 40-60% | 25-40% | 10-25% | < 10% |
| Trailing P/E | < 15 | 15-25 | 25-35 | 35-40 | > 40 or neg |
| Forward P/E | < 15 | 15-25 | 25-35 | 35-40 | > 40 or neg |
| RSI (14d) | 50-70 | 45-50 or 70-75 | 40-45 or 75-78 | 30-40 or 78-80 | < 30 or > 80 |
| vs 50d SMA | +2% to +15% | 0-2% or 15-25% | -2-0% or 25-35% | -3--2% or 35-40% | < -3% or > 40% |
| Support cushion | 2-10% above | 0-2% | 10-15% | 15-20% | price below support |
| Wall Street verdict | Aligned | — | Mixed | — | Disagrees |
| News tone | Positive | — | Neutral / Mixed | — | Negative |
| Dividend | Yield ≥ 2% & growing | Growing | Flat payer ≥ 1% | Low / flat | Cutting |
Detailed Analysis — Monday 31 August 2026
Strauss H.
Lainie Goldstein has served as Chief Financial Officer since 2010.
Receiver of capital expenditure: No: This is not a typical receiver of customer capital spending; it primarily sells entertainment content to consumers through platforms rather than selling equipment or infrastructure to enterprises.
Main customers
- Sony PlayStation Store and PlayStation platform users (Distribution partner and end-customer channel for full-game sales and in-game spending on PlayStation.)
- Microsoft Xbox Store and Xbox platform users (Distribution partner and end-customer channel for full-game sales and in-game spending on Xbox.)
- PC digital storefronts (Steam and Epic Games Store) (Digital distribution channel for PC versions of Take-Two titles and ongoing player spending.)
Notable contracts
- n/a (Take-Two’s value is driven more by franchise launches and platform distribution than by a single disclosed customer contract.)
- Take-Two is a high-quality franchise owner with unusually large upside torque to one major release cycle, especially if recurring spending scales after launch.
- The long-term case is less about a one-week launch pop and more about whether the next Grand Theft Auto era supports a multi-year online and catalog monetization ramp.
- The tradeoff is that the stock already prices in a lot of success, while current profitability metrics remain weak.
Scores 32 out of 100. a mixed overall grade. Sector fit and business quality scored highest. Valuation and relative strength versus its industry weighed on the total. Score is capped because the technical setup is not a qualifying pre-breakout (200-day trend not rising and no confirmed reclaim/hold), and because valuation is demanding relative to current profits and free cash flow while the share count has meaningfully diluted over time. Mechanical cap: latest annual net income ≤ 0 — Balance Sheet ≤ 3/15, Rev/EPS ≤ 0/20, overall ≤ 50/100.
Component scores are on the scorecard above.
- Today’s tape matters: the stock is printing $220.12 and is sharply lower versus the prior close, which aligns with a risk-off, headline-sensitive backdrop for the name.
- The technical snapshot provided is weak for a pre-breakout framework (no 200-day uptrend confirmation and no breakout confirmation), and industry relative strength is below 50, suggesting the neighborhood has not been leading even before today’s drop.
- On the latest annual figures provided, Take-Two generated $6.66B of revenue with a GAAP net loss of $298.2M and diluted EPS of -$1.62, while still producing positive free cash flow of $461.5M.
- Gross margin is 57.2%, but returns on capital are weak (ROE -9.1% and ROIC -2.3%), which means the business is not currently translating scale into consistent GAAP profitability.
- The balance sheet is not distressed, but it is not “clean”: current ratio is about 1.06 and net debt to EBITDA is about 1.60, while free cash flow yield is only about 0.8% at today’s valuation.
- A major red flag is dilution: the share count is up about 60% over five years, which raises the bar for per-share value creation even if the franchise cycle is strong.
Cash runway: Cash generative (latest annual free cash flow is positive).
Upcoming (1–6 months)
- Grand Theft Auto VI release timing and any official confirmation updates leading into the November 19, 2026 launch window.
Ongoing
- Free cash flow conversion and share count direction over the next two to three quarters, to see whether success is translating into per-share value rather than being diluted away.
Risks
- Another delay, quality issues at launch, or negative reception that reduces player engagement and limits recurring spending.
- Dilution and high investment spending continue to suppress per-share outcomes even if top-line demand is strong.
Breaks the thesis
- If the stock fails to rebuild a durable uptrend over the next several months and fundamentals do not improve into the launch window, the risk becomes that the market is unwilling to pay for the story without proof of cash flow.