Earnings Beat: Take-Two Interactive Software, Inc. (NASDAQ:TTWO) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) shareholders are probably feeling a little disappointed, since its shares fell 9.5% to US$232 in the week after its latest quarterly results. Results overall were mixed; even though revenues of US$2.0b beat expectations by 13%, statutory losses were US$0.73 per share, 17% larger than what the analysts had forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Following the latest results, Take-Two Interactive Software's 18 analysts are now forecasting revenues of US$6.49b in 2026. This would be a modest 4.4% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 90% to US$2.08. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.17b and losses of US$2.02 per share in 2026. So it's pretty clear consensus is mixed on Take-Two Interactive Software after the new consensus numbers; while the analysts lifted revenue numbers, they also administered a modest increase to per-share loss expectations.

Check out our latest analysis for Take-Two Interactive Software

The consensus price target stayed unchanged at US$276, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Take-Two Interactive Software, with the most bullish analyst valuing it at US$316 and the most bearish at US$150 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Take-Two Interactive Software's revenue growth is expected to slow, with the forecast 8.9% annualised growth rate until the end of 2026 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.6% annually. Factoring in the forecast slowdown in growth, it looks like Take-Two Interactive Software is forecast to grow at about the same rate as the wider industry.

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The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Take-Two Interactive Software will grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Take-Two Interactive Software going out to 2028, 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.

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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.

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