DCF Studio

    TTWO · NMS · Communication Services

    Take-Two Interactive Software, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 75.16

    Market price

    USD 192.10

    Implied upside

    -60.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-03-31

    Current EV/EBITDA of 31.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 75.16-60.9%
    Exit multiple
    USD 129.59-32.5%
    Market price
    USD 192.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 8.5bnUSD 9.3bnUSD 10.0bnUSD 10.7bnUSD 11.4bnUSD 12.0bnUSD 12.6bnUSD 13.1bnUSD 13.5bnUSD 13.8bn+5.5%
    EBITUSD -1.2bnUSD -1.3bnUSD -1.4bnUSD -1.5bnUSD -1.6bnUSD -1.7bnUSD -1.8bnUSD -1.9bnUSD -1.9bnUSD -2.0bn-5.5%
    NOPATUSD -973.2mUSD -1.1bnUSD -1.1bnUSD -1.2bnUSD -1.3bnUSD -1.4bnUSD -1.4bnUSD -1.5bnUSD -1.5bnUSD -1.6bn-5.5%
    Add depreciation & amortisationUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 2.9bnUSD 3.1bnUSD 3.3bnUSD 3.4bnUSD 3.6bnUSD 3.7bnUSD 3.8bn+5.5%
    Less capital expenditureUSD -254.7mUSD -294.9mUSD -337.6mUSD -382.6mUSD -429.1mUSD -476.6mUSD -524.3mUSD -571.3mUSD -616.7mUSD -659.6m+11.2%
    Capex, % of revenue3.0%3.2%3.4%3.6%3.8%4.0%4.2%4.4%4.6%4.8%-
    Less increase in working capitalUSD -182.3mUSD -70.2mUSD -69.4mUSD -67.6mUSD -64.5mUSD -60.3mUSD -55.0mUSD -48.5mUSD -41.0mUSD -32.5m-17.4%
    Free cashflow to firmUSD 922.6mUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.5bn+5.6%
    Discount factor0.95950.88320.81310.74850.68900.63430.58390.53750.49480.4555-
    Present valueUSD 885.2mUSD 980.8mUSD 961.9mUSD 936.6mUSD 905.6mUSD 869.4mUSD 828.6mUSD 784.0mUSD 736.4mUSD 686.7m-
    Present Value Of The ForecastUSD 8.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.945Reported 0.918, pulled toward 1.0 (Blume)
    Cost of equity8.89%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a D rating at -0.7x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 35.9bn92.4% of capital
    Total debtUSD 3.0bn7.6% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.63%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 75.16

    42% of EV

    Forecast FCFF, final year
    USD 1.5bn
    Capex at depreciation, working capital in reinvestment
    USD 1.1bn
    Less reinvestment at g/ROIC (29.0% of NOPAT)
    USD -332.8m
    Capitalised
    USD 816.0m
    ROIC (WACC floor)
    8.6%
    Terminal value, undiscounted
    USD 13.6bn
    Terminal value, discounted
    USD 6.2bn
    Enterprise value
    USD 14.8bn
    Less net debt
    USD 969.0m
    Equity value
    USD 13.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 129.59

    65% of EV

    Terminal value, undiscounted
    USD 35.6bn
    Terminal value, discounted
    USD 16.2bn
    Enterprise value
    USD 24.8bn
    Less net debt
    USD 969.0m
    Equity value
    USD 23.8bn

    Spread between methods: 53%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.63%98.8597.7396.6195.4994.37
    7.63%86.3985.4784.5583.6382.71
    8.63%76.7075.9375.1674.3973.62
    9.63%68.9368.2867.6266.9766.32
    10.63%62.5461.9861.4260.8660.30

    Outlined: this model. Green text: above today's price of 192.10. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year7.6%7.6%20.0%
    EBIT margin-1.6%-14.4%5.1%
    Discount rate-8.6%3.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.