Take-Two Interactive (TTWO): Is the Stock Undervalued After Recent Quiet Trading?

Take-Two Interactive Software (TTWO) shares moved quietly in recent trading, prompting many to take a closer look at how the company's performance and valuation stack up over the past month. This review comes as industry trends continue to evolve.

See our latest analysis for Take-Two Interactive Software.

While Take-Two Interactive’s 1-month share price return is slightly down, momentum has built over the year with a strong year-to-date share price gain of 32.1%. Over the past twelve months, total shareholder return reached an impressive 28.7%. This suggests that recent price action is part of a much broader, positive trend for long-term investors.

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With the stock showing solid long-term gains and trading below analyst price targets, investors are left wondering whether Take-Two Interactive is undervalued or if the market has already factored in future growth prospects. Could this be a chance to buy?

Most Popular Narrative: 12.5% Undervalued

The most closely watched narrative sets Take-Two Interactive's fair value at $276.45, comfortably above the last close price of $241.84. The gap between these figures creates a sense of opportunity and anticipation among investors tracking the company’s momentum and future outlook.

The company's ability to drive double-digit growth in recurrent consumer spending, now a dominant share of net bookings, through expanding premium in-game content (for example, NBA 2K and GTA Online), positions earnings and margins to become less cyclical and more stable over time.

Read the complete narrative.

Curious how this high fair value is justified? The most-followed narrative is built around blockbuster earnings growth, rising margins, and a future profitability transformation that might surprise many. Want to know what bold financial projections analysts are relying on to set this target? Find out what’s fueling the consensus by diving deeper into the narrative.

Result: Fair Value of $276.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing delays to blockbuster titles or a sharp drop in mobile growth could easily disrupt Take-Two's positive profit outlook.

Find out about the key risks to this Take-Two Interactive Software narrative.

Another View: What Do Sales Ratios Tell Us?

While the most-followed narrative sees Take-Two Interactive as undervalued, a look at its sales multiple presents a different perspective. The stock trades at 7.2 times sales, noticeably higher than both its peer average (5.8x) and the broader US Entertainment industry (1.3x), and also above the market’s fair ratio of 5.1x. This indicates an elevated valuation risk if market sentiment shifts. Could investors be overestimating future growth?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Take-Two Interactive Software Narrative

If you think there’s more beneath the surface or want to dig into the data personally, you can craft your own view in just a few minutes. Do it your way

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Take-Two Interactive Software.

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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.