Take Two Interactive Software Inc (NASDAQ: TTWO)

Sector: Communication Services Industry: Electronic Gaming & Multimedia CIK: 0000946581
Market Cap 34.06 Bn
P/B 9.74
P/E -8.59
P/S 5.19
ROIC (Qtr) -92.90
Div Yield % 0.00
Rev 1y % (Qtr) 24.94
Total Debt (Qtr) 3.51 Bn
Debt/Equity (Qtr) 1.00
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About

Take-Two Interactive Software Inc., often referred to as TTWO, is a prominent player in the interactive entertainment industry, developing, publishing, and distributing console and PC games, as well as mobile applications. The company operates through its Rockstar Games, 2K, Private Division, and Zynga labels. Take-Two's main business activities involve the creation and distribution of high-quality gaming titles, which have received critical acclaim and commercial success worldwide. These activities span across multiple genres, platforms, and regions....

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Investment thesis

Bull case

  • Healthy cash reserves of 2.25B provide 3.46x coverage of short-term debt 651.50M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 487.80M exceeds capital expenditure of 180.10M by 2.71x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 4.80B provides 10.85x coverage of working capital 442.90M, indicating strong operational backing.
  • Operating cash flow of 667.90M provides strong 3.50x coverage of tax liabilities 190.80M, showing excellent fiscal position.
  • R&D investment of 1.11B represents healthy 0.85x of deferred revenue 1.31B, indicating strong future innovation pipeline.

Bear case

  • Operating cash flow of 667.90M barely covers its investment activities of (421.60M), with a coverage ratio of -1.58, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (421.60M) provide weak support for R&D spending of 1.11B, which is -0.38x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 2.25B provide limited coverage of acquisition spending of (28.10M), which is -80.14x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 667.90M provides insufficient coverage of deferred revenue obligations of 1.31B, which is 0.51x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 667.90M shows concerning coverage of stock compensation expenses of 306.50M, with a 2.18 ratio indicating potential earnings quality issues.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Electronic Gaming & Multimedia
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NTES NetEase, Inc. 76.19 Bn 15.89 4.76 0.91 Bn
2 EA Electronic Arts Inc. 50.25 Bn 73.90 6.88 1.89 Bn
3 RBLX Roblox Corp 43.57 Bn -40.91 8.91 1.64 Bn
4 TTWO Take Two Interactive Software Inc 34.06 Bn -8.59 5.19 3.51 Bn
5 PLTK Playtika Holding Corp. 1.22 Bn 14.21 0.45 2.54 Bn
6 SOHU Sohu.com Ltd 0.46 Bn 1.16 0.78 0.00 Bn
7 GRVY GRAVITY Co., Ltd. 0.45 Bn 8.02 1.09 0.00 Bn
8 DDI DoubleDown Interactive Co., Ltd. 0.43 Bn 4.17 1.19 0.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.56 0.73
EV to Cash from Ops. EV/CFO 53.31 9.02
EV to Debt EV to Debt 10.14 42.93
EV to EBIT EV/EBIT -9.14 5.14
EV to EBITDA EV/EBITDA -15.14 -0.17
EV to Free Cash Flow [EV/FCF] EV/FCF 73.00 2.00
EV to Market Cap EV to Market Cap 1.05 0.31
EV to Revenue EV/Rev 5.43 -278.61
Price to Book Value [P/B] P/B 9.74 5.21
Price to Earnings [P/E] P/E -8.59 5.61
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1,143.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.62
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.95
Interest Coverage Int. cover (Qtr) -42.24 2.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -11.52 -144.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 72.04 2,047.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -9.12 10.58
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -35.13 -40.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -16.81 28.44
EBT Growth (1y) % EBT 1y % (Qtr) -16.10 -25.09
EPS Growth (1y) % EPS 1y % (Qtr) -5.62 -25.14
FCF Growth (1y) % FCF 1y % (Qtr) 198.63 -203.71
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 34.69 977.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.66 0.61
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.70 1.98
Current Ratio Curr Ratio (Qtr) 1.14 4.93
Debt to Equity Ratio Debt/Equity (Qtr) 1.00 -1.05
Interest Cover Ratio Int Coverage (Qtr) -42.24 2.42
Times Interest Earned Times Interest Earned (Qtr) -42.24 2.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -35.90 9,395.66
EBIT Margin % EBIT Margin % (Qtr) -59.38 10,488.08
EBT Margin % EBT Margin % (Qtr) -60.79 -43,333.75
Gross Margin % Gross Margin % (Qtr) 56.00 57.20
Net Profit Margin % Net Margin % (Qtr) -60.40 -43,332.40