TTWO DCF calculator
Value Take-Two Interactive on your own assumptions. It starts from a steady company, with free cash flow, cash and shares from TTWO's SEC filings. Change any of them and see what the shares would be worth.
On your assumptions
$37.73 a share82% below today's $205.28
If free cash flow grows as set, buying at $205.28 would earn about 3.6% a year, less than the 10.2% you asked for.
At that pace, $205.28 becomes about $245.45 in five years, counting the cash the business hands back or keeps.
Show the workings
What the value is made of
- Cash flows, years 1 to 10$2.6B
- Everything after year ten$2.6B
- Cash and short-term investments$1.8B
- All of it, over 0.19bn shares$7.1B
How much the answer moves
Value per share as the return you want and early growth change around your choice.
| Return ↓ · growth → | -5.0% | 0.0% | 5.0% | 10.0% | 15.0% |
|---|---|---|---|---|---|
| 8.2% | $34.11 | $40.36 | $47.92 | $56.98 | $67.76 |
| 9.2% | $30.53 | $35.76 | $42.06 | $49.60 | $58.56 |
| 10.2% | $27.89 | $32.36 | $37.73 | $44.16 | $51.78 |
| 11.2% | $25.85 | $29.74 | $34.41 | $39.98 | $46.58 |
| 12.2% | $24.24 | $27.67 | $31.78 | $36.67 | $42.47 |
Year by year
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Free cash flow | $354M | $372M | $391M | $410M | $431M | $448M | $466M | $485M | $504M | $524M |
| Worth today | $322M | $306M | $292M | $278M | $265M | $250M | $236M | $223M | $210M | $199M |
TTWO's figures are from its SEC filings; the price is the last close. The estimate is yours: it is not a price target, and it is not advice.
How this DCF works
- Free cash flow: operating cash flow less capital spending and the stock paid to staff (which dilutes every other shareholder): -$13M over the last twelve months, after $351M of stock pay.
- Ten years of growth: one rate for years 1 to 5 and another for 6 to 10, then a steady rate forever.
- Discounting: each year's cash is worth less today at the discount rate. The starting rate is the 10-year Treasury yield (5.2%) plus 5 points.
- To value per share: add cash and short-term investments ($1.8B) and divide by the shares outstanding. Debt is not taken off again: free cash flow is already after the interest on it.
- What the price assumes: the growth at which this model gives back today's price. The TTWO report scores it against the free cash flow growth the company has delivered, slowed halfway toward the economy's growth, because ten more years at a past pace is rare.