TTWO
Take-Two Interactive Software, Inc.
$243.80
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 100.0% above fair value
You pay
$243.80
Bear
$73.00
Fair
$121.91
Bull
$175.20
Bear
$73.00
-70.1%
8% stage 1 growth, 11% discount
Fair
$121.91
-50.0%
14% stage 1 growth, 11% discount
Bull
$175.20
-28.1%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
198.8x
Market is pricing in (growth)
39.9%
vs 14.1% base
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 $289.86 from 57 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $121.91 per share.
Warnings
Wall Street's average price target is $289.86 (from 57 analysts). Our estimate is 89% 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