_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Take-Two Interactive Software, Inc. (XNAS:TTWO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TTWO
Name:
TAKE-TWO INTERACTIVE SOFTWARE, INC. (XNAS:TTWO)
Sector:
61.81M
Industry:
Electronic Gaming & Multimedia
CEO:
Mr. Strauss Zelnick
Total Employees:
7,799
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 561.86% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TAKE-TWO INTERACTIVE SOFTWARE, INC.(TTWO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRONIC GAMING & MULTIMEDIA INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
118.63
One Month Price Target:
$119.14
Six Month Price Target :
$121.69
Likely Price in One Year's Time:
Ticker:
$124.75
Likely Trading Range Today Under (Normal Volatility)
$118.17
Price Upper limit ($) :
$119.14
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$112.79
This week:
$105.57
This month :
$92.51
Other Primary facts
Market Cap:
19.92B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
166.69M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.78%
-13.13%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$145.74
$133.35
$91.52
$103.91
Medium risk (<10%) entry points
Buy Call
Sell Call
$129.32
Buy Put:
Sell Put:
$126.68
$107.91
$110.58
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TTWO
Sharpe Ratio:
0.66%
Comparison:
TTWO, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -73.88% lower than the industry
& is -71.26% lower than the market/S&P 500 average
Average Returns/Yield of
TTWO
Daily returns:
0.02%
Weekly returns:
0.12%
Monthly returns:
0.49%
Yearly returns:
21.16%
Comparison of returns:
Average annual returns/yield (last 3 years) is -72.06% below industry average
Classification:
TTWO, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
TTWO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.41%
Weekly Volatility:
5.39%
Monthly Volatility:
10.78%
Yearly Volatility:
37.33%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.88%
Volatility in last five trading days has been -63.36% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.92%
Weekly VaR:
-11.01%
Monthly VaR:
-22.02%
How Much Can the price of
TTWO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-76.28%
This translates to price declining to:
$95.86
This translates to price declining to:
$28.13
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
TTWO is a 55.43% riskier investment compared to the market/S&P 500 & is 33.15% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -15.03% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TTWO
Beta in relation to market/S&P 500--0.77
Expected beta in 1 year's time:
0.543
Expected beta in 3 year's time:
0.768
Unlevered (debt free) Beta:
0.738
Beta in relation to Nasdaq (XNAS):
0.712
Beta in relation to all global stocks::
0.464
Beta Comparison & Analysis
Beta of competitors/peers::
1.186
Beta is -35.31% lower than peers
Average Industry Beta:
0.604
Beta is 27.03% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.93%
Sustainable growth rate is 11.20% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.025
Alpha is -117.97% below industry average alpha yield
Alpha is -159% below the market average
Analysis of Cost of Capital of
TTWO
Equity cost of capital:
0.084
Equity cost of capital is 15.35% above industry mean WACC
Unlevered (without debt) cost of capital:
8.09%
Before-tax cost of debt:
3.85%
After-tax cost of debt:
3.04%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.04%
WACC is 44.56% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$21.03
Revenue growth rate per share of (3Y):
5.45
Annual revenue growth rate is 54.15% above the industry average
EPS:
$3.58
Expected Annual growth rate of EPS (3Y):
15.20%
Expected future EPS growth rate is -32.53% lower than the Electronic Gaming & Multimedia industry
Free cash flow (FCF) per share:
$0.85
-
-
Debt per share
$0.94
EBITDA per share
$4.51
Valuation Analysis Today of
TTWO
P/E Ratio:
78.28
P/E Ratio of Competitors/Peers:
36.88
P/E ratio is 112.24% higher than main peers & is 135.61% higher than the industry
Stock price/value with industry average P/E ratio: $118.94
TTWO is -0.26% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
5.64
Price to sales ratio is 41.90% above the industry mean
P/B (Price to book value ratio):
5.45
Price to free cash flow: 140.35
-
Net income growth rate (3Y):
226.35%
Net income growth rate is -655.57% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
4.34%
Net debt to equity ratio:
-33.51%
Debt to assets ratio:
2.49%
Net debt to assets ratio:
-19.20%
Debt-to-asset ratio is -94.07% below industry average
Ability to repay debt:
Interest coverage ratio:
103.73
Interest coverage ratio is -5.33% less than industry average
Looking forward:
Debt growth rate:
7.91%
Annual debt growth is -1% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.452
Statistical significance of correlation:
TTWO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.384
Stock price is 17.88% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.384
Correlation of price movement with Nasdaq (^IXIC):
-0.041
Covariance of price movement with the market:
-0.058
Kurtosis
4.178
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.315
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TTWO
Gross Profit Margin Ratio:
225%
Operating Profit Margin Ratio:
13.51%
Operating profit margin is -282.98% lower than the industry
Net Profit Margin Ratio:
225%
Effective Tax Rate:
10.18%
Effective tax rate is -22.19% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.55%
Return on equity (ROE) is 4987.15% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.62%
Return on assets (ROA) is -236.02% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
1.85
Current ratio is -55.82% below industry average
Cash Conversion Cycle (days):
44.1
Cash conversion cycle is -41.78% below industry average
The remaining useful life of property plant & equipment is: 4.3 years
Stock based compensation to net income ratio:
11.73%
In-depth Efficiency Analysis
Revenue generated per employee:
449.4K
Each employee generates -34% less revenue than industry average revenue per employee
EBITDA generated per employee:
96.4K
Each employee generates -25% less EBITDA than industry average revenue per employee
Profit generated per employee:
53.6K
Each employee generates -18% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
7.9K
Each employee generates 11% more free cash flow than industry average revenue per employee
Assets/Capital per employee
295.0K
Each employee generates 11% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 7.06%
Growth rate in R&D investment/expenditure is 61.66% higher than the industry
Competitors/Peer firms of
TTWO
Yandex NV (XNAS:YNDX)
LIBERTY MEDIA CORPORATION (XNAS:LSXMB)
LIBERTY MEDIA CORPORATION (XNAS:LSXMK)
DISH NETWORK CORPORATION (XNAS:DISH)
WARNER MUSIC GROUP CORP. (XNAS:WMG)
FOX CORPORATION (XNAS:FOXA)
FOX CORPORATION (XNAS:FOX)
LIBERTY GLOBAL PLC (XNAS:LBTYB)
LIBERTY GLOBAL PLC (XNAS:LBTYA)
Current Analyst Ratings
Strong buy�25%
Buy�42%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.50B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.54B
1.97B
406.57M
510.86M
1.03B
516.43M
61.11M
1.49B
-
7.25M
279.29M
751.94M
473.60M
418.02M
465.40M
47.38M
418.02M
Statement of Cash Flow
Date:
Period:
52.19M
Differed Income Tax :
-
Stock Based Compensation :
49.05M
Change in Working Capital :
- 119056.00K
Accounts Receivables:
74.68M
Other Working Capital:
- 89810.00K
Other Non-Cash Items:
13.80M
Net Cash Provided by Operating Activities:
148.24M
Investments in PP&E:
- 86433.00K
Net Acquisitions:
- 97887.00K
Purchases of Investments:
- 302581.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
6/30/21
2022
Q1
1.40B
1.14B
2.54B
487.17M
11.49M
978.89M
4.01B
388.34M
645.59M
912.91M
-
78.38M
275.41M
2.30B
-
6.31B
67.14M
31.36M
-
824.52M
1.24B
2.17B
156.95M
309.35M
517.62M
-
2.68B
1.39M
2.02B
- 2770.0K
1.60B
June 30, 2021 at 6:00:00 AM
3.03B
3.62B
6.30B
-
188.31M
- 1212564.0K
161.15M
311.89M
- 13857.00K
-
9.23M
-
-
- 48261.00K
- 39031.00K
1.78M
97.13M
2.16B
2.06B
148.24M
- 86433.00K
61.81M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
TTWO
2023
2024
2025
2026
2027
$125.37
$206.84
$217.50
$228.71
$240.50