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Electronic Arts
(NASDAQ:EA)
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Rating:69Neutral
Price Target:
$221.00
▲(8.42% Upside)
Action:Downgraded
Date:05/06/26
The score is driven primarily by strong cash generation and a conservative, improving balance sheet, which provide resilience despite softer net income and margins. Offsetting this are a very expensive valuation (high P/E, low yield) and only modest/weak technical momentum, while corporate-event updates are supportive due to record bookings/cash flow and continued progress toward the pending acquisition.
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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Electronic Arts Key Performance Indicators (KPIs)
Any
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.
Shows the distribution of bookings across different business segments, highlighting which areas are driving growth and where the company is focusing its strategic efforts.
Data provided by:
The Fly
The FlyElectronic Arts (EA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$51.46B
Dividend Yield0.37%
Average Volume (3M)2.00M
Price to Earnings (P/E)57.8
Beta (1Y)0.27
Revenue Growth1.72%
EPS Growth-17.04%
CountryUS
Employees13,700
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)3.55
Shares Outstanding250,751,480
10 Day Avg. Volume2,120,174
30 Day Avg. Volume1,999,750
Financial Highlights & Ratios
PEG Ratio-3.37
Price to Book (P/B)7.54
Price to Sales (P/S)6.77
P/FCF Ratio21.94
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue6.58
Enterprise Value/Gross Profit8.34
Enterprise Value/Ebitda33.31
Forecast
1Y Price Target
$208.80Price Target Upside2.44% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)8.91
Revenue Forecast (FY)$8.28B
Electronic Arts Business Overview & Revenue Model
Company Description
Electronic Arts Inc., established in 1982 and based in Redwood City, California, is a global leader in the creation, promotion, publication, and distribution of interactive entertainment. The company delivers a wide array of games, content, and se...
How the Company Makes Money
EA primarily makes money by selling and monetizing video games and related digital services across console, PC, and mobile platforms. A major revenue stream is full game sales (digital downloads and physical units) from new releases and catalog ti...
Electronic Arts Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
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.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.
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.
Read all updates
Q1-2026 Updates
Positive
Negative
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.
Read all positive updates
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
Income Statement
72
Positive
Balance Sheet
80
Positive
Cash Flow
84
Very Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.53B | 7.46B | 7.56B | 7.43B | 6.99B |
| Gross Profit | 5.95B | 5.92B | 5.85B | 5.63B | 5.13B |
| EBITDA | 1.25B | 2.02B | 2.05B | 1.92B | 1.63B |
| Net Income | 887.00M | 1.12B | 1.27B | 802.00M | 789.00M |
Balance Sheet | |||||
| Total Assets | 13.13B | 12.37B | 13.42B | 13.46B | 13.80B |
| Cash, Cash Equivalents and Short-Term Investments | 2.98B | 2.25B | 3.26B | 2.77B | 3.06B |
| Total Debt | 1.55B | 2.22B | 1.95B | 1.95B | 1.96B |
| Total Liabilities | 6.37B | 5.98B | 5.91B | 6.17B | 6.17B |
| Stockholders Equity | 6.76B | 6.39B | 7.51B | 7.29B | 7.63B |
Cash Flow | |||||
| Free Cash Flow | 2.32B | 1.86B | 2.12B | 1.34B | 1.71B |
| Operating Cash Flow | 2.55B | 2.08B | 2.31B | 1.55B | 1.90B |
| Investing Cash Flow | -276.00M | 37.00M | -207.00M | -217.00M | -2.80B |
| Financing Cash Flow | -1.57B | -2.86B | -1.62B | -1.60B | -1.62B |
Electronic Arts Technical Analysis
Positive
203.83
Price Trends
202.32
Positive
201.81
Positive
200.54
Positive
Market Momentum
0.87
Negative
67.11
Neutral
83.05
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 203.83 is above the 20-day moving average (MA) of 203.73, above the 50-day MA of 202.32, and above the 200-day MA of 200.54, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 67.11 is Neutral, neither overbought nor oversold. The STOCH value of 83.05 is Negative, 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 27 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $83.58B | 16.22 | 21.64% | 2.19% | 8.50% | 7.29% | |
69 Neutral | $51.46B | 57.81 | 14.19% | 0.37% | 1.72% | -17.04% | |
65 Neutral | $7.15B | 53.40 | 8.04% | ― | 11.20% | ― | |
63 Neutral | $47.34B | -157.81 | -8.57% | ― | 18.16% | 93.64% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
55 Neutral | $39.67B | -35.08 | -276.20% | ― | 38.10% | -16.91% | |
52 Neutral | $1.47B | -5.02 | 113.59% | 9.98% | 7.30% | -307.46% |
* Communication Services Sector Average
EA
Electronic Arts
205.21
50.45
32.60%
NTES
NetEase
127.24
-2.45
-1.89%
TTWO
Take-Two
254.99
14.88
6.20%
BILI
Bilibili
17.14
-3.74
-17.91%
PLTK
Playtika Holding
3.87
-0.83
-17.64%
RBLX
Roblox
55.41
-52.35
-48.58%
Electronic Arts Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Electronic Arts Reports Record Bookings and Cash Flow
Positive
May 5, 2026
Electronic Arts reported record net bookings of $8.03 billion and operating cash flow of $2.55 billion for the fiscal year ended March 31, 2026, supported by the successful launch of Battlefield 6 and continued growth in its live services portfoli...
M&A TransactionsRegulatory Filings and Compliance
Electronic Arts Clears Key Antitrust Hurdle in Merger
Positive
Feb 10, 2026
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, wil...
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.