Take-Two Interactive Software, Inc. (NASDAQ:TTWO) Just Reported And Analysts Have Been Cutting Their Estimates
Shareholders might have noticed that Take-Two Interactive Software, Inc. (NASDAQ:TTWO) filed its yearly result this time last week. The early response was not positive, with shares down 2.7% to US$226 in the past week. It was a pretty bad result overall; while revenues were in line with expectations at US$5.6b, statutory losses exploded to US$25.58 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
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Following the latest results, Take-Two Interactive Software's 23 analysts are now forecasting revenues of US$6.00b in 2026. This would be a satisfactory 6.5% improvement in revenue compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$2.55 per share. Before this earnings report, the analysts had been forecasting revenues of US$7.79b and earnings per share (EPS) of US$0.96 in 2026. So we can see that the consensus has become notably more bearish on Take-Two Interactive Software's outlook following these results, with a pretty serious reduction to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous calls for a profit.
See our latest analysis for Take-Two Interactive Software
The average price target lifted 7.5% to US$243, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Take-Two Interactive Software analyst has a price target of US$275 per share, while the most pessimistic values it at US$137. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Take-Two Interactive Software shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Take-Two Interactive Software's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Take-Two Interactive Software is also expected to grow slower than other industry participants.
The most important thing to take away is that the analysts are expecting Take-Two Interactive Software to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Take-Two Interactive Software. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Take-Two Interactive Software going out to 2028, and you can see them free on our platform here..
You can also view our analysis of Take-Two Interactive Software's balance sheet, and whether we think Take-Two Interactive Software is carrying too much debt, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.
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