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Take Two | TTWO & GTA VIIs TakeTwo Interactive Software Fairly Valued? We use what is known as a 2 stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Present Value of 10-year Cash Flow (PVCF) = US $9.1b The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.5%. The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$27b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$139, the company appears about fair value at a 14% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Take-Two Interactive Software as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.5%, which is based on a levered beta of 1.071. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Take-Two Interactive Software, we've put together three pertinent items you should explore: Risks: To that end, you should be aware of the 1 warning sign we've spotted with Take-Two Interactive Software Future Earnings: How does TTWO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! long story short Using the 2 Stage Free Cash Flow to Equity, Take-Two Interactive Software fair value estimate is US$162 and with US$138 share price, Take-Two Interactive Software appears to be trading close to its estimated fair value
Editors' picks
NASDAQ:TTWOLong
by moonypto
14
Take-Two Interactive Faces Setbacks Amidst Lowered ForecastsTake-Two Interactive Software Inc., ( NASDAQ:TTWO ) renowned for its iconic titles like "Grand Theft Auto" and "Red Dead Redemption," recently faced a tumultuous period marked by lowered fiscal forecasts and the postponement of a highly anticipated game release. Despite these setbacks, analysts remain cautiously optimistic about the company's future, citing a strong content pipeline and the potential for blockbuster releases. Let's delve into the intricacies of Take-Two Interactive's ( NASDAQ:TTWO ) recent challenges and the silver linings that offer hope to investors. A Bumpy Ride in Fiscal Q3: In its fiscal third-quarter earnings report, Take-Two Interactive ( NASDAQ:TTWO ) revealed a 3% year-over-year decline in total net bookings, amounting to $1.34 billion for the three months ending December 31, 2023. The slip in net bookings was accompanied by increased marketing costs and a net loss, including an impairment charge, totaling $91.6 million. Notably, sales of "NBA 2K24" fell short of expectations, although the company remains optimistic about the title's long-term performance. Game Delays and Revised Forecasts: Adding to the company's woes was the announcement of a delay in the release of an unspecified game originally slated for the fourth quarter of the fiscal year. This, coupled with challenges in the mobile gaming advertising segment, prompted Take-Two Interactive ( NASDAQ:TTWO ) to revise its guidance for full-year net bookings downward to a range of $5.25 billion to $5.30 billion, down from the previous projection of $5.45 billion to $5.55 billion. The news sent shockwaves through the market, leading to an 8% drop in the company's stock price. Bright Spots Amidst Adversity: Despite the setbacks, Take-Two Interactive's ( NASDAQ:TTWO ) mobile gaming division, Zynga, managed to find success with titles like "Match Factory!" and "Toon Blast." Better-than-expected in-app purchases and the promising performance of "Match Factory!" encouraged the company to ramp up marketing efforts for the title, betting on its long-term profitability. Moreover, analysts highlighted the strength of Take-Two Interactive's content pipeline as a key factor supporting its resilience amidst challenges. Analysts' Optimism and Future Prospects: While the short-term outlook may seem turbulent, analysts maintain a positive outlook on Take-Two Interactive's ( NASDAQ:TTWO ) long-term prospects. Jefferies Equity Research suggests that the stock may remain "range-bound" until the company provides more clarity on the release of "Grand Theft Auto VI," a highly anticipated installment in the acclaimed franchise. Goldman Sachs analysts echoed this sentiment, emphasizing the company's solid operating momentum and the potential realization of its content pipeline in the years ahead. Conclusion: Take-Two Interactive Software Inc., ( NASDAQ:TTWO ) finds itself at a crossroads, grappling with challenges such as game delays and lowered forecasts while navigating the dynamic landscape of the gaming industry. However, amidst adversity, the company retains several bright spots, including successful titles in its portfolio and optimism from analysts regarding its long-term trajectory. As investors await further developments, the resilience and strategic vision of Take-Two Interactive ( NASDAQ:TTWO ) will undoubtedly play a crucial role in shaping its future success.
NASDAQ:TTWOShort
by DEXWireNews
Flight Boarding - Grand Theft Auto 6Hey fellow gamers and number-crunchers, gather 'round! 🎮 Big news alert: Rockstar Games is dropping the first trailer for Grand Theft Auto 6 on December 5, 2023! twitter.com Now, for those who live and breathe gaming, no further explanation needed. But hey, to the data lovers and boomers in the house, let me break it down for you. Rockstar is the genius behind hits like Grand Theft Auto, Red Dead Redemption, Bully, and La Noire. Flashback to 2013 when they unleashed Grand Theft Auto 5, which turned out to be the best-selling console/PC-only game EVER. Talk about a gaming legend! Fast forward to now, and GTA 5 has racked up a mind-blowing 185 million units in sales by August 2023. That's across three console generations and PC, making it the cash cow of the entertainment world. Hold on to your controllers because Grand Theft Auto 6 is gearing up for launch, and the prediction is a whopping $1 billion in sales from the get-go! 🤑 Experts are betting on at least 25 million copies flying off the shelves on release day. For the financial gurus out there, I've got the deets on TTWO Rockstar Games history prices in my previous analysis. And if you're eyeing the market, the sweet spot for entering the trade seems to be at that red horizontal line at 146 - 150. But here's the cherry on top: I believe we're aiming for a new all-time high beyond 210! 🚀 So, who's ready for the next gaming revolution? 🌟 Share your thoughts below and let the positive vibes flow! 🚀🎉
Editors' picks
NASDAQ:TTWOLong
by GoldCartel
35
Grand Theft Auto VI Trailer Release Leak Hits Take-Take SharesAnother online leak marred the highly anticipated release of Take-Two's Grand Theft Auto VI videogame trailer. Take-Two Interactive (TTWO) - shares slumped lower Tuesday after the videogame maker arranged the early release of a trailer for its highly anticipated Grand Theft Auto VI title. The new release, which comes nearly a decade after the previous title in the popular videogame franchise, will be available in 2025, Take-Two said, and will mark the 25th anniversary of its collaboration with Rockstar Games, the division that created the original title. The new Grand Theft Auto trailer, however, had been scheduled for debut later this morning. Indications from Rockstar suggested portions of the trailer were leaked online, compelling the company to bring forward its release time. Take-Two shares were marked 3.2% lower in premarket trading to indicate an opening bell price of $152.60 each, a move that would still leave the stock more than 50% higher for the year. The Grand Theft Auto VI trailer was last seen to have around 9.9 million views on Google-owned YouTube and could provide a compelling boost to both the gamemaker's current offerings and the 2025 release. "The upcoming release of the new Grand Theft Auto game is expected to generate substantial enthusiasm, acting as a key driver for current Rockstar Games titles and live services, including 'Grand Theft Auto 5', 'Grand Theft Auto Online', and the 'Red Dead Redemption' franchise,'" said Benchmark analyst Mike Hickey. The anticipated release of 'Grand Theft Auto Next' is likely to boost TTWO's growth significantly in fiscal years 2025 and 2026. Technical Analysis TTWO is trading near the top of its 52-week range and above its 200-day simple moving average. Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
NASDAQ:TTWOLong
by DEXWireNews
Time to buy into the GTA 6 hype?Tomorrow will be the day the first trailer for GTA 6 will be released. It's been nearly ten years since GTA 5 was released and broke world records. The wait for GTA 6 can not be compared to another game. The hype and anticipation are off the charts. This creates a unique investment opportunity. Looking at the historical prices news related to GTA has created considerable share price movements. Especially when related to GTA 6. In September 2022, a leak about GTA 6 caused Take-Two’s stock to plummet. Recently, when Rockstar announced in November that early December is when we would see the first news around GTA 6 the shares gapped up and rose around 17.17% in 30 days. There is considerable space for big gains when Rockstar releases the trailer tomorrow. It all rides on the investor's expectations, which will largely be following the customer's expectations. If the customers see it being good and the trialer receives a lot of attention, positive of course, then the share price will inevitables go up. Trailer released => Large positive response by customers => investors excited and happy => share prices rise. Now of course this is the short-term outlook. What about the long-term? The game will most likely be released next year in the fall. But this game will no doubt break records and will allow Take-Two, the company that owns Rockstar, to profit handsomely. Just as GTA 5 did. This therefore seems like a great opportunity to buy the shares before the short-term rapid rise and possible long-term outlook. However, speaking long-termly this would need a different piece of analysis that I'm not doing right now. But all I will say is the potential for long-term growth is there and this could be a good buying in price right now. It would be difficult to put a price range for tomorrow. But I would say between 20% - 30%, which is around the all time high. But I do see potential for further upside tomorrow.
NASDAQ:TTWOLong
by BlackbearTrader
GTA VI Effect?Take Two Interactive, while on the downward sloping trend has formed a cup & handle pattern and successfully managed to break out of the range. The arrival of next Grand Theft Auto series is likely to push the stock up as it is likely to be one of the best selling titles in the gaming industry. The stock has many supporting reasons to drive its price higher as we may see the continuation of GTA Online (for both V & VI) which has been a massive success amongst the community and also for Rockstar as it has helped generate regular income from its business model. Other than being the best GTA ever, it will incorporate features from other successful titles such as Red Dead Redemption 2, which arguably had better graphics than GTA V & all other games from the parent company in the past. We may also see Rockstar borrowing elements from RDR 2 like character physics & animals such as horses which have never been present in GTA before. This will be biggest & best release ever from the GTA series unlike Apple claiming their Iphone to be which is merely different from its previous iterations. Moreover, the stock is down from its all time high and thus we can expect to see it breaking its previous highs with the next GTA on its cards. The stock looks good for a long term holding as Rockstar has high estimates from its upcoming titles in 2024-25 and none other than next GTA can achieve this level of sales. Rockstar has other upcoming titles too in the pipeline that may contribute to their success in the future.
NASDAQ:TTWOLong
by nikhilchhabra
Take-Two Stock Surged in Anticipation of GTA 6 AnnouncementTake-Two Interactive shares surged as much as 9.4% in premarket trading Wednesday, as investors received the first confirmation that the next installment in the Grand Theft Auto franchise is on the horizon. The company is slated to report its fiscal second-quarter 2024 earnings after the bell. Take-Two has suggested it could launch in 2024. The company in May said it will enter its next phase of growth in fiscal 2025, which begins in April 2024, as it plans to “deliver several groundbreaking titles that we anticipate will set new standards of quality and success and enable us to deliver over $8 billion in Net Bookings and over $1 billion in Adjusted Unrestricted Operating Cash Flow.” GTA V was announced in 2011 and released in 2013. It remains popular 10 years later. The current release of the game, “Grand Theft Auto V,” is the second best-selling game of all time by units sold after Microsoft -subsidiary Mojang’s Minecraft. It’s developed by Take-Two subsidiary Rockstar. Rockstar’s franchises, which include Grand Theft Auto but also Red Dead Redemption, have helped fuel Take-Two’s share price growth and $23.16 billion market cap. Earlier this year, the company signaled that 2024 and beyond would be a “significant” period for the company. Investors and consumers alike have long awaited the release of the next Grand Theft Auto game. GTA V was lauded for its graphics and playing style, and to this day continues to contribute ongoing revenue to Take-Two through its online platform. In August, when the company reported its fiscal 2024 first-quarter earnings, total net bookings grew 20% year over year to $1.20 billion. Among the largest contributors, the company said in a release, were Grand Theft Auto Online and Grand Theft Auto V. Technical Analysist Price Momentum TTWO is trading near the top of its 52-week range and above its 200-day simple moving average. What does this mean? Investors have been pushing the share price higher, and the stock still appears to have upward momentum. This is a positive sign for the stock's future value.
NASDAQ:TTWOLong
by DEXWireNews
Take Two | TTWO & GTA VI. Part IITakeTwo Interactive is preparing for the biggest catalyst in the company's history with the release of GTA 6. Although no definitive timetable has been set for GTA 6, the game will almost certainly release in 2024 or 2025 at the latest given all the information that has come out. Moreover, TTWO itself has started opening up about GTA 6, which is a hint that an announcement is near. The impact that GTA 6 will have on TTWO cannot be understated, given how much resources have been spent developing GTA 6 and the growing consumer frenzy surrounding the title.TTWO could see more upward momentum as GTA 6's release closes in. GTA 6 is by far the most anticipated video game in the industry's history. The game is so hyped, in fact, that individuals have crashed televised events purely to protest for the release of GTA 6. Even Starfield, which is an incredibly hyped game in its own right, had it Gamescon presentation disrupted by a fan calling for GTA 6. GTA 6 has not even been announced yet, and it seems to have fully captured the attention of the gaming world. This level of organic hype is an incredibly positive sign for TTWO and its investors. Despite the fact that GTA 5 had nowhere near the hype as GTA 6 at similar stages in their development, GTA 5 still managed to become the best-selling triple A game ever made, with ~185 million units sold. This is a testament to GTA 6's potential, both on a commercial and even cultural standpoint. If GTA 6 manages to meet or exceed consumer expectations, TTWO should see its shares surge. Given the hysteria surrounding the title, positive reviews will only supercharge demand as consumers will likely find any reason to get their hands on the game. Considering the amount of resources TTWO is rumored to be spending on developing GTA 6, coupled with Rockstar's track record of producing masterpieces, there is very little chance that GTA 6 disappoints. While GTA is TTWO's most important IP, the company also boasts a strong lineup beyond GTA. In fact, some of its other franchises are bestsellers in their own right. Red Dead Redemption, for instance, has sold more than 55 million units and continues to sell at a solid pace despite the game being nearly 5 years old. Red Dead Redemption has also been critically praised as one of the best triple A games ever made. TTWO currently has one of its most robust product pipelines in the history of the company across all of its studios. The company has even diversified into mobile gaming, which is proving to be an increasingly large segment in the gaming industry. In fact, TTWO made a huge acquisition in Zynga for a whopping $12.7 billion. Zynga is one of the largest mobile gaming studios in the world and owns massively popular IPs like FarmVille. Despite TTWO's growing pipeline, the company is still relatively top-heavy compared to peers like EA (EA) or Activision Blizzard (ATVI). This means that underperformance for its flagship franchises, especially GTA, will almost certainly cause the company's value to plummet. So much of TTWO's future prospects are dependent upon the success of GTA 6, especially considering how much revenue the game is expected to pull in. To gain some perspective on how important the GTA franchise is for TTWO, GTA has generated over $8 billion in revenue since GTA 5's release in 2013. TTWO itself is only worth ~$23 billion. GTA online, for instance, still contributes heavily to the company's recurring revenue and bookings, which came in at $1.2 billion in its most recent quarter. TTWO has a huge opportunity with GTA 6. The game has garnered unprecedented hype that is starting to grow to a fever pitch. If TTWO delivers a solid sequel, GTA 6 could potentially deliver revenues upwards of ~$20 billion over the next decade, given the revenue trajectory of GTA sequels. At TTWO's current valuation of $23 billion, the company has far more upside, given the potential of GTA 6 and the company's growing pipeline of popular titles.
NASDAQ:TTWOLong
by moonypto
TTWO - 40 % Shorting Opportunity is Soon to Present Itself?Fundamental Indicators: Sector – Communication Services US Business Cycle Stage – late cycle, when this sector is neutral Revenue- consistently growing since 2015, average 5-year rate at 16% Profits – significantly dropped compared to 2021 by circa 60% Net margin - significantly dropped compared to 2021 to 4.26% P/E – extremely high at 131 compared to S&P500 with 21 Liabilities - debt ratio is at 0.46 which is within normal limits, Net Debt/ EBITDA is at 3.06 – no problems with debt Conclusion – it is very likely to continue correcting deeper Technical Analysis (Elliott Waves): Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently in the corrective stage of wave 4 (see higher timeframe graph) The bear move that has been developing since the historic high is likely to be just the first leg of this global wave 4 which can be counted as a complex WXY sequence. Where wave W is a double zig-zag, wave X is a Running Triangle, and wave Y has seen its W and X legs almost completed The target for the final wave Y is around $86 which is at the 0.618x Fibonacci retracement level of global wave 3 This is a higher timeframe to reflect the full history of TTWO and to provide full wave count: What do you think about TTWO and its short term prospects? Also let me know if you would like to see other stocks, indices, Forex or Crypto analysed using Elliott Waves. Thanks
NASDAQ:TTWOShort
by vitalalyt
1
Grand Theft Auto 6Take-Two owns Rockstar Games and has developed and published many notable games, including its most famous Grand Theft Auto series, Red dead redemption, Mafia series, and a few other big games, including 2K. Last month, Rockstar announced Grand Theft Auto V expanded and enhanced Edition for Sony PS5, Xbox Series X, and will launch on November 11, 2021. Based on the previous game's announcement and release, Rockstars games always gives a significant push to TTWO. (Charts attached below) Technical analysis: - Based on my chart, I believe TTWO will have a big announcement in November 2021 (maybe they will announce Grand Theft Auto 6) and most likely will continue the rally beyond $200. - Currently, a Potential Head and Shoulder pattern may fall to retest the bottom trend line. It is pretty safe to short sell it down to the major bottom trendline, then start to invest long-term once the price retests the major bottom trendline. Grand Theft Auto 5 announced Grand Theft Auto 5 Released Red Dead Redemption 2 Announced Red Dead Redemption 2 Released Grand Theft Auto 5 New Generation Consoles Announcement
NASDAQ:TTWOLong
by GoldCartel
4
Rising Wedge - Take-Two InteractiveThe chart pattern is showing a rising wedge. While technical indicators are showing we are below two moving averages 20 and 200 (acting as resistance). MACD, RSI and DMI showing bulls are running out of buying power. TD Sequential is about to give us a SELL signal with a "red 2", below "red1", below the "green 9". If the stock market does continue to rise, I think we can bounce off the 50 moving average. However, If the 50 days moving average doesn't hold, and support fails (around 114-116), there will be a lot more downside to come. I will look to take profit if I am holding this stock.
NASDAQ:TTWOShort
by johninvest17
Shark Cards sellout & Story LineI talked past view days to a view gamers as we met for a Twitch Aniversary and good some good indications for the future things here. Those people played over 900 hours of this game (solo), so they have the experience to say what is going on. First of all, still a lot of hackers are online, nobody gets banned / maybe a view, but you can't do anything against them. Even if you usually play, they could spam you money, and you get banned. That is a big issue in the game, still not fixed. So that leads a lot of people to play Story Modus, which is annoying over time or quit the game. That is a loos in money because Shark Cards are the main income stream of the game after you purchased the game. Positive for us investors is that the last DLC got some new items in the game which are high priced which leads people to buy Shark Cards. Depending what you want to get you have to invest around $200 to get an Office, Car and some other stuff. If someone plays the game longer, he may have a lot of money or still a bite of the cake so they would have to invest also between $30-$90 which is still pretty good. In the end, we have people leaving the game, joining again because of the DLC, buy Shark Cards to get faster in the game or on top. Opportunities: 1. In my opinion, a movie would make a lot of sense or a series. I mean, this is a game people enjoy, love and we have seen the real people like Trevor or Michael in real life. So there would be a chance to get a one-hit wonder again. 2. To continue the story with a paid DLC would also make sense or a second storyline to keep with this characters. It makes a lot of fun to play the story, and maybe it would be nice to get a more extended story, with more heists going on. That would be one of the principal things to continue the game without online gaming & cheaters. Conclusion: I see a long-term profit opportunity here because for short-term we are moving to slow and we have not enough space to rice to new dimensions. To get a good hit here, I would say I have to invest around 20-60k to have a good profit by the end of the year. To much risk, in my opinion, to put that much on it, I would go with 10k which could lead to profit around 1k+. Not much but maybe we get the space we need, and some new fresh wind will come in for Take-Two
NASDAQ:TTWOLong
by dominiktoday