Take-Two Interactive Software, Inc.

Date: March 10, 2024.

Company’s Overview

Take-Two (TTWO), a video game powerhouse, entertains the globe. From their New York headquarters, they develop and publish interactive entertainment through renowned labels like Rockstar Games and 2K. Consoles, PC, and mobile platforms host their action-packed worlds, bringing joy to gamers worldwide.

Competition

Revenue Segments

The Company’s net sales proportions by segment for the most recent quarterly report are composed by:

Related Risks

Take-Two, the global gaming giant, isn’t just about creating joypads and pixels. They navigate a complex world of risks, from economic slumps and fierce competition to keeping up with tech leaps. Their reliance on a few blockbuster franchises adds pressure, and development delays or legal battles can be costly. They also face hurdles like evolving consumer tastes, platform restrictions, and attracting top talent. But Take-Two isn’t playing on easy mode. They’re diversifying their franchises, forging strategic alliances, and innovating like gaming ninjas. Cybersecurity threats, changing platform policies, and the need for a skilled workforce are also on their radar.

Financial Analysis

Company’s Revenues

Revenues from 2021 to last quarter report:

• Take-Two Interactive Software revenue for the quarter ending December 31, 2023 was $1.366B, a 2.95% decline year-over-year.
• Take-Two Interactive Software revenue for the twelve months ending December 31, 2023 was $5.396B, a 11.64% increase year-over-year.
• Take-Two Interactive Software annual revenue for 2023 was $5.35B, a 52.64% increase from 2022.
• Take-Two Interactive Software annual revenue for 2022 was $3.505B, a 3.91% increase from 2021.
• Take-Two Interactive Software annual revenue for 2021 was $3.373B, a 9.19% increase from 2020.

The yearly revenue from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Company’s Net Income

Net Income from 2020 to last quarter report:

• Take-Two Interactive Software net income for the quarter ending December 31, 2023 was $-0.092B, a 40.29% decline year-over-year.
• Take-Two Interactive Software net income for the twelve months ending December 31, 2023 was $-1.452B, a 259.73% increase year-over-year.
• Take-Two Interactive Software annual net income for 2023 was $-1.125B, a 369.07% decline from 2022.
• Take-Two Interactive Software annual net income for 2022 was $0.418B, a 29.02% decline from 2021.
• Take-Two Interactive Software annual net income for 2021 was $0.589B, a 45.6% increase from 2020.

The yearly net income from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Company’s EPS

EPS from 2021 to last quarter report:

• Take-Two Interactive Software EPS for the quarter ending December 31, 2023 was $-0.54, a 40.66% decline year-over-year.
• Take-Two Interactive Software EPS for the twelve months ending December 31, 2023 was $-8.78, a 288.5% increase year-over-year.
• Take-Two Interactive Software 2023 annual EPS was $-7.03, a 296.37% decline from 2022.
• Take-Two Interactive Software 2022 annual EPS was $3.58, a 29.67% decline from 2021.
• Take-Two Interactive Software 2021 annual EPS was $5.09, a 43.79% increase from 2020.

Company’s Free Cash Flow

Free Cash Flow from 2021 to 2023:

• Take-Two Interactive Software annual free cash flow for 2023 was $-0.203B, a 304.33% decline from 2022.
• Take-Two Interactive Software annual free cash flow for 2022 was $0.099B, a 88.21% decline from 2021.
• Take-Two Interactive Software annual free cash flow for 2021 was $0.843B, a 33.39% increase from 2020.

The yearly free cash flow from 2010 till 2023 is:

**The 2024 and 2025 values are the expected by the analysts

Shares Outstanding

During the three months ended December 31, 2023, the Company did not repurchase shares of its common stock. It has repurchased a total of 11.7 shares of its common stock under the program, and as of December 31, 2023, 10.0 shares of its common stock remained available for repurchase under the share repurchase program.

However, the Company has increased its outstanding shares mostly to finance acquisitions and raise capital for some operations.

Asset/Liabilities & Current Ratio

Take-Two Interactive Software’s asset-to-liability ratio of 2.33 indicates a comfortable financial position. This means they have more than enough assets to cover their liabilities by a significant margin.

On the other hand, the current ratio of 0.82 raises a slight concern. This ratio measures the company’s ability to meet its short-term obligations (debts due within a year) using its short-term assets (cash, receivables, etc.).

Valuation

Based on DCF analysis, TTWO’s stock price is overvalued. Note that in the analysis we take into consideration also the cash and cash equivalents and the total debt.

According to WallStreetZen, a significant majority of top-rated analysts currently rate Take-Two as a Strong Buy or Buy, with 92.9% expressing this sentiment. Only 7.1% consider it a Hold, and no analysts recommend or strongly recommend selling the stock. The stock has demonstrated robust performance year-over-year, with a 39.7% increase

Take-Two Interactive Software is a gaming powerhouse with a bright future. Their recent game announcements are sure to excite fans and potentially boost revenue. Plus, their focus on reinvesting for growth suggests long-term commitment.

However, the current ratio raises a minor yellow flag, and the overvalued stock price requires careful consideration. While some bumps exist on the road, Take-Two’s dedication to innovation and its upcoming releases suggest they have more wins in store for investors who can stomach some short-term jitters.

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Disclaimer

Please note that I am not a licensed financial advisor and the information provided here should not be construed as financial advice. I am simply sharing my understanding of the topics based on my research and personal experiences. It is always advisable to consult with a qualified financial advisor before making any investment decisions.

The information I provide is based on publicly available sources and my own interpretations. I strive to provide accurate and up-to-date information, but I cannot guarantee the correctness or completeness of the information.

Any opinions expressed here are my own and do not necessarily reflect the views of any other individual or organisation.

Please use your own judgement and conduct your own research before making any investment decisions.