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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2116
Positioning
Market Dominance
Services
Computer Software
$47.7B
Strauss H. Zelnick
Take-Two Interactive Software, Inc. develops, publishes, and markets interactive entertainment solutions for consumers worldwide. Rockstar Games, 2K, Private Division, Social Point, and Playdots labels offer its products under various labels. The company provides its products through physical retail, digital download, online platforms, and cloud streaming services.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = TTWO ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | 21.3% | 18.6% | 64.5% | 35.7% | 39.5% | 6.5% | 0.0% | 0.0x | $644M | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | 15.4% | 12.6% | 38.7% | 17.1% | 17.0% | -39.7% | 0.0% | 0.0x | $439M | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 28.1% | 16.8% | 48.1% | 23.8% | 18.5% | 78.6% | 0.0% | 37.0x | $220M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | 12.4% | 2.9% | 100.0% | 28.2% | 26.2% | 5.5% | 0.8% | 264.0x | $19.4B | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.6% | 7.8% | 43.8% | 7.4% | 5.9% | 31.2% | 0.0% | 0.0x | $857M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 18.0% | 4.6% | 97.3% | 52.2% | 32.7% | -3.4% | 0.0% | 271.0x | $8.0B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | 9.4% | 4.9% | 55.5% | 8.7% | 7.7% | 13.6% | 1.3% | 7.0x | $78.0B | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | 22.1% | 15.6% | 62.5% | 28.1% | 28.7% | -1.0% | 2.8% | 9.0x | $56.6B | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 21.4% | 8.0% | 100.0% | 10.0% | 7.5% | 14.1% | 0.0% | 27.0x | $1.8B | VS | |
$TTWO TAKE TWO INTERACTIVE SOFTWARE INC | 49 | 42 | 50 | 65 | - | 275.8x | -7.2% | -2.5% | 59.2% | -1.2% | -3.6% | 24.9% | 0.0% | 186.0x | $47.7B | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.3% | 1.9% | 59.6% | 3.5% | 2.3% | 7.8% | 0.0% | 0.3x | - | REF |
TAKE TWO INTERACTIVE SOFTWARE INC (TTWO) receives a "Reduce" rating with a composite score of 49.3/100. It ranks #2116 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Strauss H. Zelnick
Chief Executive Officer
Labor Force
7,800
42
23
82
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for TTWO
Outperforming peers — winners tend to keep winning over 3-12 months
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for TTWO.
View All RatingsMaterial decline in asset turnover efficiency detected
High margin volatility — erratic forensic earnings quality
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 42 | 40 | +2NEUTRAL |
| MOMENTUM | 65 | 73 | -8DRAG |
| VALUATION | 50 | 53 | -3NEUTRAL |
| INVESTMENT | 23 | 10 | +13ALPHA |
| STABILITY | 82 | 90 | -8DRAG |
| SHORT INT | 55 | 67 | -12DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROE proxy -7.2% (sector 5.3%)
GM 59% vs sector 60%, OM -1% vs sector 4%
Capital turnover N/A
Rev growth 25%, 11yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
TAKE TWO INTERACTIVE SOFTWARE INC receives a Reduce rating from our analysis, with a composite score of 49.3/100 and 2 out of 5 stars, ranking #2116 out of 7,333 stocks. TTWO's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
TTWO's quality score of 42/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -7.2% (sector avg: 5.3%), gross margins of 59.2% (sector avg: 59.6%), net margins of -3.6% (sector avg: 2.3%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
TTWO's value score of 50/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include an EV/EBITDA of 275.79x, a P/B ratio of 10.58x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
TAKE TWO INTERACTIVE SOFTWARE INC's investment score of 23/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 24.9% vs. a sector average of 7.8% and a return on assets of -2.5% (sector: 1.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
TTWO demonstrates moderate momentum with a score of 65/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 24.9% year-over-year, while a beta of 0.68 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
TTWO shows good financial stability with a score of 82/100. Key stability metrics include a beta of 0.68 and a debt-to-equity ratio of 186.00x (sector avg: 0.3x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 55/100 for TTWO suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 186.00x). With a $47.7B market cap (large-cap), TAKE TWO INTERACTIVE SOFTWARE INC may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
TAKE TWO INTERACTIVE SOFTWARE INC is a large-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #2116 of 7,333 overall (71st percentile). Key comparisons include ROE of -7.2% trailing the 5.3% sector median and operating margins of -1.2% below the 3.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While TTWO currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (23) would have the largest impact on the composite score.
EV/EBITDA 2251% ABOVE SECTOR MEDIAN
ROE 235% BELOW SECTOR MEDIAN
Gross Margin IN LINE WITH SECTOR BENCHMARKS
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate TAKE TWO INTERACTIVE SOFTWARE INC (TTWO) as a Reduce with a composite score of 49.3/100 at a current price of $204.05. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (82th percentile) and momentum (65th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and quality (42th percentile) tempers our overall conviction. We assign a No Moat rating (29/100), High uncertainty, and Poor capital allocation.
Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
TAKE TWO INTERACTIVE SOFTWARE INC holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.3/100 places it at rank #2116 in our full 7,333-stock universe. With a $47.7B market capitalization, TAKE TWO INTERACTIVE SOFTWARE INC operates at meaningful scale within the Services sector, providing competitive advantages in distribution, procurement, and customer reach.
The near-term outlook is constructive, with revenue growing at 25% and momentum in the 65th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 23th percentile indicates reinvestment patterns that investors should monitor for sustainability.
The margin cascade tells an important story: gross margins of 59% (-0.4pp vs sector) narrow to operating margins of -1% (-4.7pp vs sector) and net margins of -3.6%, yielding a gross-to-net conversion rate of -6%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $204.05, TAKE TWO INTERACTIVE SOFTWARE INC is trading near fair value based on current fundamentals. Our value factor score of 50/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at EV/EBITDA of 275.8x (at a premium), P/B of 10.6x, P/S of 5.7x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.
Gross margins of 59% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
Revenue growth of 25% confirms the business is expanding its addressable market — growth at this level typically supports multiple expansion and attracts institutional capital.
The Reduce rating (composite 49.3/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Elevated leverage (186% D/E) amplifies downside risk and limits management's financial flexibility in adverse scenarios.
Thin net margins of -3.6% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
We assign a High uncertainty rating to TAKE TWO INTERACTIVE SOFTWARE INC. Key risk factors include significant leverage (186% debt-to-equity), current negative profitability (net margin -3.6%), low beta of 0.68 — while defensive, this may indicate limited upside participation in bull markets. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: significant leverage (186% debt-to-equity); current negative profitability (net margin -3.6%); low beta of 0.68 — while defensive, this may indicate limited upside participation in bull markets; the combination of leverage (186% D/E) and thin margins (-3.6% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 82th percentile and quality factor at the 42th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 59% provide a buffer against cost pressures; above-average stability (82th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate TAKE TWO INTERACTIVE SOFTWARE INC's capital allocation as Poor. Key concerns include low returns on equity (-7.2%), elevated leverage (186% D/E), negative profitability, weak asset returns (ROA -2.5%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — TAKE TWO INTERACTIVE SOFTWARE INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, TAKE TWO INTERACTIVE SOFTWARE INC receives a Reduce rating with a composite score of 49.3/100 (rank #2116 of 7,333). Our quantitative framework assigns a No Moat (29/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 53/100.
Our analysis does not support a constructive view on TAKE TWO INTERACTIVE SOFTWARE INC at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign TAKE TWO INTERACTIVE SOFTWARE INC a meaningful economic moat, scoring 29/100 on our composite assessment. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 11.7/20.
The strongest moat sources are growth durability (11.7/20) and margin superiority (11/20). Rev growth 25%, 11yr history. GM 59% vs sector 60%, OM -1% vs sector 4%. These pillars form the core of TAKE TWO INTERACTIVE SOFTWARE INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and economic value creation (0.9/20). Capital turnover N/A. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect TAKE TWO INTERACTIVE SOFTWARE INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 59% providing a solid profitability foundation, robust top-line growth of 25% expanding the revenue base. The margin cascade from 59% gross to -1% operating to -3.6% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 42th percentile.
The margin profile shows gross margins of 59%, operating margins of -1%, net margins of -3.6%. Return metrics include ROE of -7.2% and ROA of -2.5%. Relative to the Services sector, gross margins are 0.4 percentage points below the sector median of 60%, and ROE of -7.2% compares to a sector median of 5.3%.
The balance sheet reflects high leverage with D/E of 186%, which may limit financial flexibility, revenue growth of 25%. The sector median D/E is 0%, putting TAKE TWO INTERACTIVE SOFTWARE INC at higher leverage than the typical peer. Elevated leverage in combination with the current margin profile warrants close monitoring for any deterioration in debt-servicing capacity.
Above 50MA
37.18%
Net New Highs
+51081
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