Electronic Arts (EA) AI Stock Analysis

• Market Cap: $50.21B
• Dividend Yield: 0.37%
• Average Volume (3M): 2.72M
• Price to Earnings (P/E): 75.3
• Beta (1Y): 0.33
• Revenue Growth: -1.45%
• EPS Growth: -11.99%
• Country: US
• Employees: 13,700
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 4.88
• Shares Outstanding: 250,253,710
• 10 Day Avg. Volume: 4,426,408
• 30 Day Avg. Volume: 2,717,552
• 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: 0.98
• Enterprise Value/Revenue: 6.73
• Enterprise Value/Gross Profit: 8.63
• Enterprise Value/Ebitda: 36.31
• 1Y Price Target: $208.00
• Price Target Upside: 3.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 8.64
• Revenue Forecast (FY): $8.13B

• Rating: 70 Outperform
• Price Target: $221.00 ▲(10.16% Upside)

Score is driven primarily by strong financial quality—high margins and standout free-cash-flow strength—supported by manageable leverage. Offsetting factors are weak near-term technical momentum and a rich valuation (high P/E with low dividend yield). Corporate events are a net positive due to merger progress and debt redemption, but remaining approvals and litigation add uncertainty.

Positive Factors

Free Cash Flow Strength

Consistently high free cash flow and a 39.1% TTM FCF increase give EA durable internal funding for content investment, dividends, buybacks and debt reduction. Strong cash conversion also cushions the business against cyclical title timing and supports multi-year live-service roadmaps.

Healthy Balance Sheet

Moderate leverage and sizable equity provide financial flexibility for content spend and M&A while limiting refinancing risk. A manageable debt profile supports durable investment in franchises and reduces vulnerability to interest-rate swings during the 2–6 month transition to private ownership.

Franchise & Live-Service Momentum

Strong bookings and engagement from Battlefield 6, EA SPORTS FC and Apex Legends highlight durable franchise power and live-service monetization. Recurring spend from live services smooths revenue across cycles and strengthens long-term unit economics and player retention.

Negative Factors

Mixed Revenue Momentum

Revenue shows pronounced cadence risk: annual growth was modestly negative while TTM surged, reflecting release timing and product mix. This lumpy top-line undermines predictability of cash flow and complicates resource allocation for multi-quarter content roadmaps and live operations.

Margin Compression

A step-down in net margin reduces earnings resilience and the share of revenue that converts to free cash flow. If margin pressure persists from higher content, marketing or platform fees, it will erode capacity to fund growth initiatives and return cash to stakeholders over the medium term.

Merger Legal & Execution Risk

Pending merger-related litigation and the transition to private ownership introduce execution risk, potential delays and extra costs. Litigation and governance changes can distract management, alter capital priorities and create uncertainty around longer-term strategy during the ownership transition.

Electronic Arts Business Overview & Revenue Model

Company Description

Electronic 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 Money

EA generates revenue through multiple streams, primarily from the sale of video game titles and in-game purchases. The company sells both physical and digital copies of its games, with a growing emphasis on digital distribution through platforms like Origin and various console marketplaces. In addition to traditional game sales, EA has significantly monetized its titles through microtransactions, allowing players to purchase virtual items, upgrades, and additional content within games. Subscription services, such as EA Play, also contribute to revenue by offering members access to a library of games for a monthly fee. Additionally, EA engages in partnerships and licensing agreements, particularly in the sports gaming sector, where it collaborates with leagues and teams for authentic branding and player likenesses, further enhancing its revenue potential.

Electronic Arts Financial Statement Overview

Summary

High-margin model and excellent free-cash-flow generation are the key positives (TTM FCF $2.30B; +39.1% growth). Balance sheet leverage is manageable (debt-to-equity ~0.24–0.35), though debt rose in FY2025. Main risk is near-term profitability pressure with lower TTM net margin (~12.1%) versus prior periods and mixed revenue momentum (FY2025 -1.3% vs TTM +24.7%).

Income Statement

EA shows strong profitability with very high gross margins (about 76–79% across periods) and solid operating margins. Revenue growth is mixed: annual growth has been modest to slightly negative recently (FY2025: -1.3%), while TTM (Trailing-Twelve-Months) shows a strong rebound (+24.7%). The main weakness is earnings volatility—TTM profitability stepped down versus FY2024–FY2025 levels, with net margin falling to ~12.1% (from ~15–16.8% previously), indicating weaker conversion of revenue into bottom-line profit in the most recent run-rate.

Balance Sheet

The balance sheet looks healthy with moderate leverage: debt-to-equity remains low-to-moderate (~0.24–0.35), providing flexibility and limiting financial risk. Equity is sizable relative to assets, and returns on equity are generally solid (roughly 11–18%), though TTM return on equity (~13.7%) is below the stronger FY2024–FY2025 results. A key watch item is the increase in total debt in the latest annual period (FY2025: $2.2B vs FY2024: $1.95B), though leverage remains very manageable.

Cash Flow

Cash generation is a standout: TTM (Trailing-Twelve-Months) operating cash flow is strong ($2.52B) with very high free cash flow ($2.30B) and a sharp TTM free cash flow growth rate (+39.1%). Free cash flow consistently tracks net income well (roughly ~0.87–0.94x over time), indicating good earnings quality and disciplined cash conversion. The main drawback is that operating cash flow covers only a moderate portion of obligations in the provided coverage metric (~0.47–0.75 historically; ~0.58 TTM), suggesting cash commitments and/or working-capital swings can meaningfully affect near-term coverage.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.32B	7.46B	7.56B	7.43B	6.99B	5.63B
Gross Profit	5.71B	5.92B	5.85B	5.63B	5.13B	4.13B
EBITDA	1.36B	2.02B	2.05B	1.92B	1.63B	1.24B
Net Income	680.00M	1.12B	1.27B	802.00M	789.00M	837.00M
Balance Sheet
Total Assets	13.28B	12.37B	13.42B	13.46B	13.80B	13.29B
Cash, Cash Equivalents and Short-Term Investments	2.90B	2.25B	3.26B	2.77B	3.06B	6.37B
Total Debt	1.95B	2.22B	1.95B	1.95B	1.96B	1.95B
Total Liabilities	7.13B	5.98B	5.91B	6.17B	6.17B	5.45B
Stockholders Equity	6.15B	6.39B	7.51B	7.29B	7.63B	7.84B
Cash Flow
Free Cash Flow	2.30B	1.86B	2.12B	1.34B	1.71B	1.81B
Operating Cash Flow	2.52B	2.08B	2.31B	1.55B	1.90B	1.93B
Investing Cash Flow	0.00	37.00M	-207.00M	-217.00M	-2.80B	-505.00M
Financing Cash Flow	-2.54B	-2.86B	-1.62B	-1.60B	-1.62B	-15.00M

Electronic Arts Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 200.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EA, the sentiment is Negative. The current price of 200.62 is below the 20-day moving average (MA) of 202.16, below the 50-day MA of 203.33, and above the 200-day MA of 179.65, indicating a neutral trend. The MACD of -0.91 indicates Positive momentum. The RSI at 38.63 is Neutral, neither overbought nor oversold. The STOCH value of 51.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EA.

Electronic Arts Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTES	74 Outperform	$72.95B	16.55	22.36%	2.19%	5.69%	32.87%
EA	70 Outperform	$50.21B	75.32	10.03%	0.37%	-1.45%	-11.99%
PLTK	66 Neutral	$1.24B	14.23	―	9.98%	7.49%	-60.32%
BILI	65 Neutral	$12.80B	119.30	5.30%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TTWO	57 Neutral	$35.86B	-8.66	-86.22%	―	13.98%	-6.71%
RBLX	52 Neutral	$44.77B	-40.98	-345.84%	―	32.70%	12.57%

Electronic Arts Corporate Events

Electronic Arts Clears Key Antitrust Hurdle in Merger

Electronic Arts Inc. entered into a merger agreement on September 28, 2025, under which Oak-Eagle MergerCo, Inc., a subsidiary of Oak-Eagle AcquireCo, Inc. formed by a consortium including the Public Investment Fund, Silver Lake, and Affinity, will merge with EA, leaving EA as a wholly owned subsidiary of the consortium’s parent entity. The expiration of the Hart-Scott-Rodino Act waiting period on February 9, 2026, removes a key antitrust hurdle and satisfies an important closing condition, though the deal still requires additional regulatory approvals and is expected to close in the first quarter of EA’s fiscal year ending March 31, 2027, corresponding to April 1 to June 30, 2026.

The most recent analyst rating on (EA) stock is a Hold with a $202.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.

Electronic Arts Declares Dividend Amid Acquisition Transition

Electronic Arts reported preliminary results for its third fiscal quarter ended December 31, 2025, highlighting record quarterly net bookings of $3.046 billion, up 38% year over year, driven by the landmark launch of Battlefield 6, which became 2025’s best-selling shooter and set new franchise engagement records. EA SPORTS FC posted high single-digit net bookings growth excluding deluxe timing effects, Apex Legends delivered double-digit net bookings growth, and quarterly net revenue came in at $1.901 billion with operating cash flow of $1.826 billion, though quarterly net income declined to $88 million and trailing 12‑month net income fell to $680 million despite stronger cash generation and elevated share repurchases. On January 29, 2026, EA’s board declared a quarterly cash dividend of $0.19 per share payable on March 18, 2026, and, in the context of its pending $55 billion all-cash acquisition by an investor consortium announced on September 29, 2025, the company opted not to hold its usual earnings call, underscoring a transition period that may reshape its capital structure and governance while strong live-services momentum continues to underpin its operating performance.

The most recent analyst rating on (EA) stock is a Hold with a $207.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.

Electronic Arts Fully Redeems $400 Million Notes Due 2026

On January 6, 2026, Electronic Arts Inc. redeemed in full the $400 million outstanding principal amount of its 4.800% notes due 2026, using cash on hand to pay 100% of the principal plus accrued and unpaid interest up to, but excluding, the redemption date. The transaction retires this tranche of debt in line with the terms of the existing indenture, signaling a strengthening of the company’s balance sheet and potentially reducing interest expense for stakeholders as the notes are fully removed from its capital structure.

The most recent analyst rating on (EA) stock is a Hold with a $221.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.

Electronic Arts Shareholders Approve Take-Private Merger Deal

On December 22, 2025, Electronic Arts Inc. held a special meeting of stockholders to vote on its proposed acquisition by an investor consortium led by the Public Investment Fund alongside affiliates of Silver Lake Group and Affinity Partners, reflecting a move to transition the video game publisher from public to private ownership. Shareholders overwhelmingly approved the Agreement and Plan of Merger dated September 28, 2025, with more than 201 million votes cast in favor versus under 2 million against, and also backed on a non-binding basis the merger-related compensation arrangements for the company’s named executive officers, while a proposal to adjourn the meeting was rendered unnecessary because sufficient support for the merger had already been secured.

The most recent analyst rating on (EA) stock is a Buy with a $224.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.

Electronic Arts Faces Lawsuits Over Merger Agreement

On September 28, 2025, Electronic Arts Inc. entered into a merger agreement with Oak-Eagle AcquireCo, Inc. and Oak-Eagle MergerCo, Inc., entities owned by a consortium including the Public Investment Fund, Silver Lake, and Affinity. This merger will result in Electronic Arts becoming a wholly owned subsidiary of the consortium. Following the merger announcement, several lawsuits were filed by purported stockholders alleging omissions and misrepresentations in the merger-related proxy statement. Electronic Arts denies these claims but has issued supplemental disclosures to avoid delays in the merger process. The company maintains that the claims are without merit and that no additional disclosures were legally necessary.

The most recent analyst rating on (EA) stock is a Hold with a $223.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.