• Wondering if Take-Two Interactive Software is fairly priced or if the current share price leaves room on the table? This article focuses squarely on what the numbers say about value.
• The stock last closed at US$204.22, with returns of 5.4% over the past 30 days, an 18.8% decline year to date, and a 2.2% decline over the past year. This is set against a 79.8% return over three years and 19.9% over five years.
• Recent coverage has focused on Take-Two's position as a major publisher in the gaming industry, its portfolio of well known franchises, and ongoing interest in how it balances content investment with shareholder returns. This background helps frame why investors are watching the share price moves closely and asking whether the current level is supported by fundamentals.
• Right now, Take-Two scores 2 out of 6 on a valuation check framework. Next you will see how different methods such as DCF and multiples compare, and then finish with a way to pull those valuation signals together more effectively.

Take-Two Interactive Software scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Take-Two Interactive Software Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company might be worth by projecting the cash it could generate in the future and then discounting those cash flows back to today using a required rate of return.

For Take-Two Interactive Software, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $470.6 million. Analyst estimates and Simply Wall St extrapolations project free cash flow reaching about $2.53 billion in 2030, with interim years gradually stepping up from hundreds of millions to several billions of dollars in projected cash generation.

When those projected cash flows are discounted back to today, the DCF model points to an estimated intrinsic value of about $213.84 per share. Compared with the recent share price of $204.22, this implies the stock trades at roughly a 4.5% discount to the DCF estimate, which is a relatively small gap.

Result: ABOUT RIGHT

Take-Two Interactive Software is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Take-Two Interactive Software Price vs Sales

For companies where current earnings can be noisy, price to sales is often a useful way to think about value, because it compares what investors are paying to the revenue the business is generating rather than the bottom line.

Growth expectations and risk still matter here, because faster and more reliable revenue growth, or lower perceived risk, usually justify a higher “normal” or “fair” P/S multiple than slower or more uncertain growth.

Take-Two currently trades on a P/S ratio of 5.77x. That is above the Entertainment industry average of 1.41x and also above the peer group average of 4.29x. Simply Wall St’s proprietary Fair Ratio for Take-Two is 3.72x, which reflects factors such as the company’s growth profile, profit margins, risk characteristics, industry and market cap.

This Fair Ratio is more tailored than a simple comparison with industry or peers, because it adjusts for the specific mix of growth, risks and profitability rather than treating all companies as if they are the same. Comparing the Fair Ratio of 3.72x with the current P/S of 5.77x suggests the shares are trading above what that framework would point to.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Take-Two Interactive Software Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced as a simple way for you to attach a clear story about Take-Two Interactive Software to concrete numbers such as your assumed fair value and your expectations for future revenue, earnings and margins.

A Narrative on Simply Wall St connects three things in one place: the company story you believe, the forecast that flows from that story, and the fair value that those assumptions produce.

On the Community page, where millions of investors share their work, Narratives are presented as easy-to-read fair value profiles that help you compare your own view with others and see how a chosen fair value stacks up against the current share price.

Narratives are updated automatically when new information such as news, guidance or earnings is added to the platform, so the story and the numbers stay aligned without extra effort from you.

For Take-Two, one investor might build a bullish Narrative around a Fair Value of US$300.00 with revenue growth and margin assumptions similar to the highest analyst targets, while another might anchor on a Fair Value near US$181.99 with more cautious assumptions. Comparing those Narratives side by side can help you decide whether the current price feels closer to your own story or far enough away to consider action.

Do you think there's more to the story for Take-Two Interactive Software? Head over to our Community to see what others are saying!

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.