Take-Two Interactive Software, Inc. (TTWO) Intrinsic Value & DCF Valuation
Electronic Gaming & Multimedia · NASDAQ
Current Price
$246.43
Intrinsic Value
Outside reliable range
What Is Take-Two Interactive Software, Inc.'s Intrinsic Value?
The base-case DCF model produces an intrinsic value estimate for Take-Two Interactive Software, Inc. (TTWO) that falls outside its reliable range, so treat any single number with extra caution. This usually happens with unusual cash flow patterns or rapid recent changes in the business.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Take-Two Interactive Software, Inc. (TTWO) Undervalued?
Because the model output for TTWO is outside the reliable range, no undervalued or overvalued read is given here. Use the calculator below to test your own assumptions instead.
COMPETITIVE MOAT
↑Dominant Franchise Powerhouse
The immense success of franchises like Grand Theft Auto and Red Dead Redemption creates significant brand loyalty and anticipation for new releases. This drives substantial pre-orders and initial sales, establishing a strong market position.
↑Recurrent Consumer Spending Ecosystem
Take-Two has cultivated a robust ecosystem of recurrent consumer spending through in-game purchases and subscriptions. This diversifies revenue streams beyond initial game sales, fostering ongoing engagement and predictable income.
↑Strategic IP Acquisition and Development
The company's ability to acquire and nurture valuable intellectual property, alongside its internal development capabilities, allows it to consistently deliver high-quality, sought-after gaming experiences. This fuels long-term franchise value.
INVESTMENT RISKS
↓Long Development Cycles and Delays
Developing AAA titles is a lengthy and expensive process. Any significant delays or development issues with major upcoming releases, like GTA 6, can negatively impact financial performance and investor sentiment.
↓Dependence on Blockbuster Success
While franchises are strong, the company's financial results are heavily influenced by the performance of its few major titles. A misstep or underperformance of a flagship game could disproportionately harm revenue.
↓Evolving Player Preferences and Monetization
Player tastes and expectations for game monetization models are constantly shifting. Failure to adapt to these changes, such as the demand for live services or new engagement mechanics, could erode player loyalty and revenue.
Base case
TTWO base case valuation
Base case assumptions: 7.4% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the TTWO valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Take-Two Interactive Software, Inc. respond.
Open DCF Calculator for TTWOCompany Overview
Established in 1993 and headquartered in New York, New York, Take-Two Interactive Software, Inc. is a global leader in the development, publishing, and marketing of interactive entertainment experiences for consumers worldwide. The company's extensive catalog is primarily distributed under its prominent labels: Rockstar Games, 2K, Private Division, and T2 Mobile Games. Rockstar Games is renowned for its action-adventure titles, including iconic franchises like Grand Theft Auto, Red Dead Redemption, Max Payne, and Midnight Club, alongside other fan favorites such as LA Noire, Bully, and Manhunt. The 2K label covers a broad spectrum of genres, offering popular series in shooter (Borderlands), action (BioShock, Mafia), role-playing, strategy (Sid Meier's Civilization, XCOM series), sports, and family/casual categories. This includes highly successful sports simulation games like the NBA 2K basketball series, WWE 2K professional wrestling, and PGA TOUR 2K. Private Division supports titles such as Kerbal Space Program, OlliOlli World, The Outer Worlds, and Ancestors: The Humankind Odyssey. For mobile device users, T2 Mobile Games provides free-to-play options like Dragon City, Monster Legends, Two Dots, and Top Eleven. Take-Two's diverse range of products is designed for major gaming platforms, encompassing current and previous generation consoles (PlayStation 4, PlayStation 5, Xbox One, Nintendo Switch), personal computers, and mobile devices (smartphones and tablets). Consumers can purchase these games through traditional physical retail channels, digital storefronts for download, various online platforms, and cloud streaming services.
Financial Metrics — TTWO Stock Valuation Data
Revenue/Share (TTM)
$35.92
FCF/Share (TTM)
$2.43
ROIC (TTM)
-0.8%
ROE (TTM)
-8.6%
P/FCF
101.7x
EV/EBITDA
39.8x
FCF Yield
0.98%
Debt/Equity
0.84x
Based on trailing twelve-month data, TTWO shows a free cash flow per share of $2.43 and a ROIC of -0.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 101.7x and FCF yield of 0.98% are important context metrics when evaluating TTWO's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of TTWO?
Take-Two Interactive Software, Inc. currently generates $2.43 in free cash flow per share. At the current price of $246.43, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is TTWO undervalued?
TTWO trades at a P/FCF ratio of 101.7x with a free cash flow yield of 0.98%. A high P/FCF means investors are paying more per dollar of free cash flow, which usually reflects expectations of future growth. However, whether TTWO is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value TTWO stock using DCF?
To perform a DCF valuation on Take-Two Interactive Software, Inc.: (1) Start with the trailing free cash flow per share ($2.43) as the base, (2) project future FCF growth over 5-10 years based on Electronic Gaming & Multimedia industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting TTWO's risk profile — with a debt-to-equity of 0.84x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to TTWO?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Take-Two Interactive Software, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Electronic Gaming & Multimedia trends, then discounting those amounts to today's dollars. TTWO's ROIC of -0.8% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect TTWO stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For TTWO, with a debt-to-equity ratio of 0.84x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 39.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See TTWO PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Technology valuationsDCF and P/E value TTWO with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.