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Electronic Arts (EA)
NASDAQ:EA
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Electronic Arts (EA) AI Stock Analysis

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EA

Electronic Arts

(NASDAQ:EA)

Rating:77Outperform
Price Target:
$194.00
▲(12.64% 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
Game Launch Success
The initial launch of BF6 Beta was a resounding success, showing strong engagement with the gaming community.
Market Competitiveness
BF6 surpassed Call of Duty's three-year record for concurrent players, indicating strong interest and competitiveness in the market.
Player Engagement Strategy
EA appears to be following the path of prioritizing community engagement, which could meaningfully enhance player retention.
Negative Factors
Execution Risk
New FTP mode hinted, but there is execution risk.
Player Count Challenges
Reports suggest that Battlefield 6 has ambitious targets for player count, which may be challenging to reach.
Unchanged Guidance
Despite the strong performance in F1Q26, EA's FY26E guidance remains unchanged, indicating potential uncertainty in future releases.

Electronic Arts (EA) vs. SPDR S&P 500 ETF (SPY)

Electronic Arts Business Overview & Revenue Model

Company DescriptionElectronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and license games from others, including FIFA, Madden NFL, UFC, and Star Wars brands. The company licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California.
How the Company Makes MoneyEA 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 Key Performance Indicators (KPIs)

Any
Any
Bookings by Segment
Bookings by Segment
Shows the distribution of bookings across different business segments, highlighting which areas are driving growth and where the company is focusing its strategic efforts.
Chart InsightsLive Services bookings show resilience with consistent growth, while Full Game Downloads face volatility, reflecting a broader industry shift towards live services. The earnings call highlights EA's strategic focus on expanding successful franchises like The Sims and American football, which are driving significant growth. However, challenges persist with Apex Legends and full game sales, impacting overall performance. EA's investment in AI and upcoming launches like Battlefield and Skate are expected to bolster future growth, aligning with their strategy to enhance player engagement and sustain long-term success.
Data provided by:Main Street Data

Electronic Arts Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q1-2026)
|
% Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong start to the fiscal year with growth in key segments like EA SPORTS and Apex Legends. However, some challenges were noted, including a decline in live services net bookings and increased costs. The guidance for Q2 reflects some expected headwinds, but the overall outlook remains positive with a robust slate of upcoming releases.
Q1-2026 Updates
Positive Updates
Strong Start to Fiscal Year 2026
Electronic Arts delivered a strong first quarter, landing above the high end of guidance with net bookings of $1.3 billion, up 3% year-over-year.
EA SPORTS Growth
The Global Football segment saw net bookings up year-over-year with FC Online up double digits and FC Mobile having a record quarter with over 50 million installs.
Apex Legends Performance
Apex Legends performed well with sequential growth in engagement driven by strong player retention and a 27% year-over-year increase in net bookings for the F1 series.
Upcoming Releases
Exciting releases include Battlefield 6, skate., and new iterations of EA SPORTS titles such as FC, Madden NFL, and NHL, indicating a robust slate of upcoming launches.
Financial Performance
Net revenue for Q1 was $1.67 billion, up 1%, with operating cash flow at $17 million and free cash flow at $1.75 billion.
Negative Updates
Live Services Net Bookings Decline
Live services net bookings were down 1%, with a noted impact from Apex Legends, although mitigated by other areas.
Cost of Revenue and Operating Expenses
Cost of revenue was $279 million, and operating expenses increased by 9%, driven by increased people costs and strategic investments.
Q2 Guidance
Net bookings for Q2 are expected to be $1.8 billion to $1.9 billion, down 13% to down 9%, with a notable impact from the American Football ecosystem being an 8-point headwind year-over-year.
Company Guidance
During the Electronic Arts First Quarter Fiscal Year 2026 Conference Call, the company reported a strong performance, exceeding the high end of their guidance, with net bookings of $1.3 billion, up 3% year-over-year. The company highlighted their EA SPORTS business as a key strength, with Global Football net bookings up mid-single digits and FC Mobile achieving over 50 million installs, underscoring significant engagement and growth. Apex Legends also performed well with sequential growth driven by strong player retention. EA's net revenue for the quarter was $1.67 billion, with a gross margin of 83.3% and operating expenses at $1.12 billion, resulting in earnings per share of $0.79. They returned $423 million to shareholders through buybacks and dividends. Looking ahead, EA has significant upcoming releases, including Battlefield 6, and expects net bookings for the second quarter to be between $1.8 billion to $1.9 billion, despite a forecasted 9-13% decline primarily due to the phasing of EA SPORTS FC deluxe edition content.

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
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue7.47B7.46B7.56B7.43B6.99B5.63B
Gross Profit5.92B5.92B5.85B5.63B5.13B4.13B
EBITDA1.88B2.02B2.05B1.92B1.63B1.24B
Net Income1.04B1.12B1.27B802.00M789.00M837.00M
Balance Sheet
Total Assets11.70B12.37B13.42B13.46B13.80B13.29B
Cash, Cash Equivalents and Short-Term Investments1.63B2.25B3.26B2.77B3.06B6.37B
Total Debt1.95B1.95B1.95B1.95B1.96B1.95B
Total Liabilities5.62B5.98B5.91B6.17B6.17B5.45B
Stockholders Equity6.08B6.39B7.51B7.29B7.63B7.84B
Cash Flow
Free Cash Flow1.75B1.86B2.12B1.34B1.71B1.81B
Operating Cash Flow1.98B2.08B2.31B1.55B1.90B1.93B
Investing Cash Flow17.00M37.00M-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 Price172.23
Price Trends
50DMA
159.18
Positive
100DMA
152.82
Positive
200DMA
148.51
Positive
Market Momentum
MACD
4.52
Positive
RSI
61.67
Neutral
STOCH
34.82
Neutral
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 172.23 is above the 20-day moving average (MA) of 168.26, above the 50-day MA of 159.18, and above the 200-day MA of 148.51, indicating a bullish trend. The MACD of 4.52 indicates Positive momentum. The RSI at 61.67 is Neutral, neither overbought nor oversold. The STOCH value of 34.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EA.

Electronic Arts Risk Analysis

Electronic Arts disclosed 25 risk factors in its most recent earnings report. Electronic Arts reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Electronic Arts Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$87.07B17.8924.36%2.14%2.86%19.96%
77
Outperform
$43.09B43.3715.46%0.44%2.68%-6.15%
72
Outperform
$86.52B-401.21%27.39%16.59%
68
Neutral
$9.73B320.251.58%22.89%
60
Neutral
$43.56B3.79-13.01%4.09%1.89%-42.25%
59
Neutral
$1.38B16.14-220.61%10.75%4.98%-60.29%
55
Neutral
$42.77B-89.29%7.33%-7.46%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EA
Electronic Arts
172.60
23.10
15.45%
NTES
NetEase
135.07
56.75
72.46%
TTWO
Take-Two
232.03
71.53
44.57%
BILI
Bilibili
22.74
8.51
59.80%
PLTK
Playtika Holding
3.72
-3.38
-47.61%
RBLX
Roblox
122.70
79.13
181.62%

Electronic Arts Corporate Events

Executive/Board ChangesShareholder Meetings
Electronic Arts Updates Severance Plan and Elects Directors
Neutral
Aug 15, 2025

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.

DividendsBusiness Operations and StrategyFinancial Disclosures
Electronic Arts Declares Cash Dividend Amid Strong Results
Positive
Jul 29, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025