TenQ

The Take-Two Interactive story

Take-Two develops and publishes games through Rockstar Games, 2K, and Zynga, with the central question whether Grand Theft Auto VI can turn its enduring franchises and recurring player spending into sustained profits.

Take-Two Interactive stock reportTenQ Score 4/36 · every chart and check from its filings
  • $205.28share price, last close
  • $38.4Bmarket value
  • 4/36TenQ Score checks passed

The story in brief

  • A defining launch. Grand Theft Auto VI is planned for November 19, 2026, alongside management's reiterated fiscal year 2027 Net Bookings outlook of $8.0 to $8.2 billion.
  • Recurring spending dominates. Recurrent consumer spending accounted for 84% of Net Bookings in the quarter to June 2026, but total Net Bookings decreased 3% to $1.39 billion.
  • Cash exceeds accounting profits. Take-Two generated $338 million of free cash flow over the last twelve months despite an operating margin of -2.4%.

What drives the business

  • Take-Two builds its business around owned franchises, selective sports licenses, and ongoing player spending through Rockstar Games, 2K, and Zynga across console, PC, and mobile platforms.
  • Rockstar's strategy centers on a limited number of enduring titles, illustrated by Grand Theft Auto V, which has shipped over 225 million units worldwide and includes access to Grand Theft Auto Online.
  • NBA 2K, Grand Theft Auto, and mobile titles were the largest contributors to $1.39 billion of Net Bookings in the quarter to June 2026, when digital online channels accounted for 99% of Net Bookings.
  • The five largest customers accounted for 80.6% of net revenue in the fiscal year ended March 31, 2026, with Apple, Sony, Google, and Microsoft each contributing more than 10.0%.
  • Platform licensing agreements underpin console distribution, and Take-Two entered into a new long-term XBOX Publisher License Agreement with Microsoft in September 2026.

What the price assumes

The reverse DCF produces no measurable growth assumption because it uses a negative cash flow and operating earnings baseline, although Take-Two's last twelve months show positive free cash flow of $338 million.

At $204.01, the shares represent a market value of $38.1 billion and trade at 5.7x sales, above TenQ's under 2.5x sales threshold, while the 0.9% free cash flow yield falls short of its above 3% check.

The valuation therefore depends on future profit improvement, against revenue growth of 15.3% over the last twelve months and a -2.4% operating margin.

What could change the story

  • The fiscal year 2027 outlook depends on timely game releases and market acceptance, making the planned Grand Theft Auto VI launch and continued NBA 2K engagement central execution risks.
  • Development spending does not always produce a released game: the quarter to June 2026 included a $43.4 million impairment for an abandoned title from a third-party developer within a $34.1 million GAAP net loss.
  • Mobile accounted for 50% of net revenue and 53% of Net Bookings in the quarter to June 2026, but both declined from a year earlier, leaving player acquisition costs and engagement important pressures.
  • Total debt of $2.5 billion exceeded cash and short-term investments of $1.8 billion, while TenQ's liquidity and interest coverage checks failed.
  • Stock-based pay of $351 million over the last twelve months exceeded free cash flow of $338 million, making equity compensation a meaningful cost alongside the accounting losses.

What to watch next

  • The next releases will show whether Grand Theft Auto VI remains scheduled for November 19, 2026, and whether management maintains fiscal year 2027 Net Bookings guidance of $8.0 to $8.2 billion.
  • For the quarter ending September 30, 2026, management guided to Net Bookings of $1,620 to $1,670 million and a GAAP net loss of $(157) to $(140) million, providing a benchmark before the planned launch.
  • Operating cash generation and capital spending will test management's fiscal year ending March 31, 2027 expectations of over $1,000 million in operating cash flow and approximately $290 million in capital expenditures.
  • Mobile bookings and recurrent consumer spending will show whether the existing portfolio is strengthening alongside the new release schedule.

Sources

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