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Take-Two Interactive Software, Inc. (NASDAQ:TTWO) saw a significant share price rise of 28% in the past couple of months on the NASDAQGS. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Take-Two Interactive Software’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What's The Opportunity In Take-Two Interactive Software?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.2% below our intrinsic value, which means if you buy Take-Two Interactive Software today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $258.99, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Take-Two Interactive Software’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Check out our latest analysis for Take-Two Interactive Software
What does the future of Take-Two Interactive Software look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In Take-Two Interactive Software's case, its revenues over the next few years are expected to grow by 50%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in TTWO’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?