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Analysts Have Lowered Expectations For Take-Two Interactive Software, Inc. (NASDAQ:TTWO) After Its Latest Results

It's been a good week for Take-Two Interactive Software, Inc. (NASDAQ:TTWO) shareholders, because the company has just released its latest full-year results, and the shares gained 4.6% to US$155. It was a pretty bad result overall; while revenues were in line with expectations at US$5.3b, statutory losses exploded to US$22.01 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Take-Two Interactive Software

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Following the latest results, Take-Two Interactive Software's 22 analysts are now forecasting revenues of US$5.69b in 2025. This would be a modest 6.3% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 86% to US$3.16. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$7.01b and losses of US$1.23 per share in 2025. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

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The average price target was broadly unchanged at US$176, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Take-Two Interactive Software, with the most bullish analyst valuing it at US$200 and the most bearish at US$120 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Take-Two Interactive Software's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Take-Two Interactive Software is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$176, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Take-Two Interactive Software going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Take-Two Interactive Software's balance sheet, and whether we think Take-Two Interactive Software is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.