Electronic Arts (EA) AI Stock Analysis

• Market Cap: $42.98B
• Dividend Yield: 0.44%
• Average Volume (3M): 2.77M
• Price to Earnings (P/E): 43.1
• Beta (1Y): 0.44
• Revenue Growth: 2.68%
• EPS Growth: -6.15%
• Country: US
• Employees: 13,700
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.25
• Shares Outstanding: 250,207,300
• 10 Day Avg. Volume: 2,375,670
• 30 Day Avg. Volume: 2,771,955
• PEG Ratio: -3.70
• Price to Book (P/B): 5.93
• Price to Sales (P/S): 5.07
• P/FCF Ratio: 20.38
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 5.47
• Enterprise Value/Gross Profit: 6.91
• Enterprise Value/Ebitda: 21.74
• 1Y Price Target: $178.80
• Price Target Upside: 3.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 77 Outperform
• Price Target: $194.00 ▲(12.74% Upside)

Electronic Arts' strong financial performance and positive earnings call sentiment are the most significant factors driving the score. The technical analysis supports a bullish outlook, though valuation concerns due to a high P/E ratio and low dividend yield slightly temper the overall score. The company's strategic focus on new releases and innovation provides a positive long-term outlook.

Positive Factors

Strong Financial Health

EA's stable revenue growth and strong margins indicate a robust financial position, allowing for sustained investment in new projects and resilience against market fluctuations.

Robust Cash Flow

Strong cash generation supports EA's ability to fund operations, invest in growth, and return capital to shareholders, enhancing long-term shareholder value.

Upcoming Releases

A robust slate of upcoming game releases positions EA to capture market share and drive revenue growth, leveraging its strong brand and development capabilities.

Negative Factors

Decline in Live Services

A decline in live services net bookings could indicate challenges in sustaining player engagement and monetization, potentially impacting future revenue streams.

Increased Operating Expenses

Rising operating expenses may pressure margins and profitability if not offset by revenue growth, impacting long-term financial performance.

Competitive Pressure

Strong competition from other game developers could challenge EA's market position, necessitating innovation and strategic marketing to maintain its competitive edge.

Electronic Arts Business Overview & Revenue Model

Company Description

Electronic Arts (EA) is a global leader in digital interactive entertainment, primarily known for developing and publishing video games across various platforms, including console, PC, and mobile. Founded in 1982, EA operates through multiple segments, including EA Sports, EA Games, and EA Mobile, offering popular franchises such as FIFA, Madden NFL, The Sims, and Battlefield. The company focuses on creating engaging gameplay experiences and innovative content, leveraging advanced technology and player feedback to enhance its offerings.

How the Company Makes Money

EA generates revenue through several key streams: first, through the sale of game titles, which can include physical and digital copies of their games. Second, EA utilizes a robust microtransaction model within its games, particularly through in-game purchases like virtual currency, cosmetic items, and downloadable content (DLC). Subscription services, such as EA Play, offer members access to a library of games for a recurring fee, contributing to steady revenue. Additionally, EA engages in partnerships and licensing agreements, particularly in sports franchises, enabling them to leverage real-world leagues and athletes, further enhancing brand visibility and revenue potential. The company's focus on live services and ongoing content updates also helps maintain player engagement and monetization over time.

Electronic Arts Financial Statement Overview

Summary

Electronic Arts demonstrates strong financial health with stable revenue growth, strong profitability margins, and a solid balance sheet with low leverage. Cash flows are robust, supporting ongoing operations and investments. However, the volatility in free cash flow growth due to capital expenditure fluctuations is a point to monitor.

Income Statement

Electronic Arts demonstrates strong profitability with a consistent gross profit margin of around 79% and a net profit margin of 14% in TTM. Revenue growth is stable, showing a slight increase in recent periods, while the EBIT and EBITDA margins are healthy at 19% and 24% respectively, indicating efficient cost management.

Balance Sheet

The balance sheet shows a solid equity base with an equity ratio of 52% in TTM, indicating financial stability. The debt-to-equity ratio is well-managed at 0.24, suggesting low financial leverage. Return on equity is decent at 17%, reflecting effective use of shareholders' capital.

Cash Flow

The company's cash flow performance is robust, with a strong operating cash flow to net income ratio of 1.9, demonstrating excellent cash generation capability. The free cash flow to net income ratio is also favorable at 1.68, highlighting efficient capital expenditure management. However, the free cash flow growth rate shows volatility due to fluctuations in capital expenditure.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.47B	7.46B	7.56B	7.43B	6.99B	5.63B
Gross Profit	5.92B	5.92B	5.85B	5.63B	5.13B	4.13B
EBITDA	1.88B	2.02B	2.05B	1.92B	1.63B	1.24B
Net Income	1.04B	1.12B	1.27B	802.00M	789.00M	837.00M
Balance Sheet
Total Assets	11.70B	12.37B	13.42B	13.46B	13.80B	13.29B
Cash, Cash Equivalents and Short-Term Investments	1.63B	2.25B	3.26B	2.77B	3.06B	6.37B
Total Debt	1.95B	1.95B	1.95B	1.95B	1.96B	1.95B
Total Liabilities	5.62B	5.98B	5.91B	6.17B	6.17B	5.45B
Stockholders Equity	6.08B	6.39B	7.51B	7.29B	7.63B	7.84B
Cash Flow
Free Cash Flow	1.75B	1.86B	2.12B	1.34B	1.71B	1.81B
Operating Cash Flow	1.98B	2.08B	2.31B	1.55B	1.90B	1.93B
Investing Cash Flow	17.00M	37.00M	-207.00M	-217.00M	-2.80B	-505.00M
Financing Cash Flow	-2.88B	-2.86B	-1.62B	-1.60B	-1.62B	-15.00M

Electronic Arts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 172.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EA, the sentiment is Positive. The current price of 172.08 is above the 20-day moving average (MA) of 170.54, above the 50-day MA of 163.22, and above the 200-day MA of 148.91, indicating a bullish trend. The MACD of 1.62 indicates Positive momentum. The RSI at 58.29 is Neutral, neither overbought nor oversold. The STOCH value of 80.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EA.

Electronic Arts Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTES	80 Outperform	97.27B	21.30	22.87%	1.82%	2.86%	19.96%
EA	77 Outperform	$42.98B	43.12	15.46%	0.44%	2.68%	-6.15%
RBLX	72 Outperform	93.85B	-94.90	-269.61%	―	27.39%	16.59%
BILI	68 Neutral	11.41B	385.95	-9.55%	―	22.89%	0.00%
PLTK	59 Neutral	1.30B	15.57	-98.41%	11.56%	4.98%	-60.29%
TTWO	55 Neutral	46.21B	-10.47	-121.49%	―	7.33%	-7.46%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Electronic Arts Corporate Events

Electronic Arts Updates Severance Plan and Elects Directors

On August 14, 2025, Electronic Arts‘ Board of Directors approved amendments to the Change in Control Severance Plan, which now includes a pro rata bonus for the year of termination and updates to align with market practices. Additionally, during the company’s annual stockholder meeting on the same day, directors were elected, executive compensation was approved, and KPMG LLP was ratified as the independent auditor for the fiscal year ending March 31, 2026.

Electronic Arts Declares Cash Dividend Amid Strong Results

On July 25, 2025, Electronic Arts declared a cash dividend of $0.19 per share, payable on September 17, 2025. The company reported strong financial results for the first quarter of fiscal year 2026, with net bookings of $1.298 billion, surpassing expectations. EA’s diverse portfolio, including EA SPORTS and Apex Legends, contributed to this success, and the company remains confident in its full-year guidance. EA also announced plans for the upcoming launch of Battlefield 6, highlighting its strategic focus on expanding player engagement and shaping the future of interactive entertainment.