Is Take-Two Interactive Software Stock’s Drop A Chance To Buy?
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Take-Two Interactive Software (TTWO) has built its fiscal 2027 forecast around a single game, Grand Theft Auto VI, which management expects to release on November 19. Yet the shares fell 15.3% from August 10 to November 6, against a 4.6% decline for the S&P 500, and the company still lost money over its last twelve months. That is the contradiction. So how much of Take-Two’s forecast depends on Grand Theft Auto VI? You need that answer to judge whether the drop is a chance to buy. Management says it does not yet know how preorders will translate into sales.
Growth In Take-Two’s Forecast Comes From Selling Games
Management expects net bookings, its own sales measure, to reach $8 billion to $8.2 billion in fiscal 2027. At the midpoint, that is about 20% more than in fiscal 2026. The company also expects players’ repeat spending inside its games to stay in line with fiscal 2026 and make up 64% of net bookings. Growth must therefore come from the other 36%, which covers the sales of the games themselves. On the August 7 call, management said its outlook reflects ongoing positive trends in its business and its confidence around the November 19 release of Grand Theft Auto VI.
A single label will supply the largest share of the year. Management expects Rockstar Games, the label behind Grand Theft Auto VI, to deliver about 37% of net bookings. At the low end of the outlook, that equals about $3 billion. When listing the largest expected contributors to net bookings, management put the Grand Theft Auto series first. The audience is already there. Grand Theft Auto V has sold over 230 million units, and management said the new game had an exceptional start to preorders.
Investors Pay Twice The S&P 500 For Take-Two’s Sales
Take-Two trades at 6.0 times its sales over the last twelve months, compared with 3.1 for the S&P 500. The company lost $320 million over that time, making its price-to-earnings ratio not meaningful. That leaves buyers paying a premium for a business that is not yet profitable.
The operating loss has been shrinking, though. Over the twelve months to June 2024, Take-Two’s operating loss was 20.0% of sales. It narrowed to 10.0% a year later, and dropped to 2.4% over the twelve months to June 2026. The June quarter broke from that path, with Take-Two posting an operating loss of 2.3% of sales against an operating margin of 1.4% a year earlier.
Management also expects the balance sheet to turn. At June 30, Take-Two’s debt exceeded its cash by $1,118 million. Speaking on the August 7 call, management said the company remains on track to be in a net cash position by the end of fiscal 2027.
Take-Two Cannot Yet Say What Preorders Will Become
On the August 7 call, management called the level of preorders unprecedented, but said it genuinely does not know how they will translate into sales. The company kept its outlook unchanged. Management said that Take-Two had not sold one unit yet, and that a preorder can be cancelled.
Take-Two expected a weaker September quarter before the launch. In August, management projected net bookings of $1.62 billion to $1.67 billion for the quarter, against $1.96 billion a year earlier, with mobile expected to be down. That quarter has ended, and Take-Two reports its results on November 9.
Holders have also seen this stock fall harder than the market. In the 2022 inflation shock, Take-Two fell 42.0% while the S&P 500 ETF fell 24.0%. More recently, the shares rose 2.6% over the month to November 6 while the S&P 500 fell 4.9%.
When Take-Two reports in November 2026, the figures to watch are net bookings for the September quarter and whether management keeps its full-year outlook.
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