TTWO
Take-Two Interactive Software, Inc.
$227.55
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 85.2% above fair value
You pay
$227.55
Bear
$71.71
Fair
$122.87
Bull
$179.75
Bear
$71.71
-68.5%
9% stage 1 growth, 11% discount
Fair
$122.87
-46.0%
15% stage 1 growth, 11% discount
Bull
$179.75
-21.0%
19% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
43%
Implied Market Multiple
185.4x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $288.00 from 56 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $122.87 per share.
Warnings
Wall Street's average price target is $288.00 (from 56 analysts). Our estimate is 88% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions