Electronic Arts (EA) AI Stock Analysis

• Market Cap: $51.05B
• Dividend Yield: 0.37%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 59.7
• 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): 1.25
• Shares Outstanding: 250,106,120
• 10 Day Avg. Volume: 1,296,403
• 30 Day Avg. Volume: 1,736,401
• 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: 1.01
• Enterprise Value/Revenue: 7.07
• Enterprise Value/Gross Profit: 8.98
• Enterprise Value/Ebitda: 31.65
• 1Y Price Target: $215.00
• Price Target Upside: 5.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): 8.57
• Revenue Forecast (FY): $8.07B

• Rating: 66 Neutral
• Price Target: $221.00 ▲(8.22% Upside)

The score is driven by solid underlying profitability and a stable balance sheet, supported by positive technical momentum. It is held back primarily by expensive valuation (high P/E with a low dividend yield) and recent negative trends in revenue and free cash flow growth, with added uncertainty around the take-private process and related litigation.

Positive Factors

High Profitability Margins

Consistently high gross margins (>75%) and roughly 12% net margin give EA durable pricing power and strong cash generation. Its digital distribution scale and cost leverage across hit franchises support profitable operations through product cycles and fund sustained investment in live services and new IP.

Strong Balance Sheet / Debt Reduction

Redeeming the $400M notes due 2026 and maintaining a low debt-to-equity (~0.25) materially strengthen EA's capital structure. Reduced outstanding debt lowers interest burden and expands financial flexibility to fund development, live-ops, and strategic investments without immediate refinancing risk.

Diversified Monetization & Franchises

EA's portfolio of global franchises combined with microtransactions, subscriptions (EA Play), and licensing creates diversified recurring revenue. This multi-channel monetization reduces reliance on single big launches, smooths cashflows, and supports long-term player engagement and predictable monetization.

Negative Factors

Negative Revenue Growth

Revenue growth turning negative indicates exposure to timing and variability of major title releases. Such hit-driven dynamics can create sustained top-line volatility, complicate investment and hiring decisions, and make it harder to deliver consistent revenue expansion over several quarters.

Declining Free Cash Flow Growth

Free cash flow growth decline, despite strong cash conversion, constrains the company's capacity to reinvest in content, support live-service economics, pursue strategic acquisitions, or increase returns to stakeholders, reducing operational flexibility over the medium term.

Merger-Related Legal & Execution Risk

Ongoing merger-related lawsuits alleging omissions could delay closing, impose legal costs, and create governance uncertainty. These execution risks may distract management, slow strategic initiatives, and sustain regulatory or investor uncertainty for months, impacting medium-term planning.

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

Electronic Arts demonstrates solid profitability and operational efficiency, with strong margins and a stable balance sheet. However, recent negative trends in revenue and free cash flow growth highlight potential challenges in sustaining growth. The company should focus on reversing these trends to maintain its financial health.

Income Statement

Electronic Arts shows strong profitability with a consistent gross profit margin above 75% and a net profit margin around 12% in the TTM. However, the revenue growth rate has turned negative recently, indicating potential challenges in maintaining top-line growth. EBIT and EBITDA margins remain healthy, reflecting efficient operations.

Balance Sheet

The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.25 in the TTM, indicating low leverage. Return on equity is solid at 13.68%, showing effective use of equity. However, a slight decline in stockholders' equity over time could be a concern if it continues.

Cash Flow

Operating cash flow is strong, but free cash flow growth has been negative recently, suggesting potential cash management issues. The free cash flow to net income ratio is high at 88.3%, indicating good cash conversion, but the decline in free cash flow growth needs attention.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.29B	7.46B	7.56B	7.43B	6.99B	5.63B
Gross Profit	5.73B	5.92B	5.85B	5.63B	5.13B	4.13B
EBITDA	1.63B	2.02B	2.05B	1.92B	1.63B	1.24B
Net Income	885.00M	1.12B	1.27B	802.00M	789.00M	837.00M
Balance Sheet
Total Assets	11.85B	12.37B	13.42B	13.46B	13.80B	13.29B
Cash, Cash Equivalents and Short-Term Investments	1.26B	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	5.85B	5.98B	5.91B	6.17B	6.17B	5.45B
Stockholders Equity	6.00B	6.39B	7.51B	7.29B	7.63B	7.84B
Cash Flow
Free Cash Flow	1.65B	1.86B	2.12B	1.34B	1.71B	1.81B
Operating Cash Flow	1.87B	2.08B	2.31B	1.55B	1.90B	1.93B
Investing Cash Flow	-5.00M	37.00M	-207.00M	-217.00M	-2.80B	-505.00M
Financing Cash Flow	-2.91B	-2.86B	-1.62B	-1.60B	-1.62B	-15.00M

Electronic Arts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 204.22
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 204.22 is above the 20-day moving average (MA) of 204.15, above the 50-day MA of 202.51, and above the 200-day MA of 171.85, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 59.74 is Neutral, neither overbought nor oversold. The STOCH value of 29.33 is Neutral, 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	81 Outperform	$85.40B	17.79	24.65%	2.19%	5.69%	32.87%
PLTK	66 Neutral	$1.41B	15.66	―	9.98%	7.49%	-60.32%
EA	66 Neutral	$51.05B	59.66	13.20%	0.37%	-1.45%	-11.99%
BILI	62 Neutral	$11.91B	111.66	5.30%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TTWO	53 Neutral	$46.63B	-11.18	-86.61%	―	13.98%	-6.71%
RBLX	51 Neutral	$51.87B	-51.83	-324.24%	―	32.70%	12.57%

Electronic Arts Corporate Events

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.

EA Announces $55 Billion Acquisition Agreement

On October 24, 2025, EA’s Audit Committee declared a cash dividend of $0.19 per share, payable on December 23, 2025. EA reported a 13% year-over-year decline in net bookings for the second fiscal quarter ended September 30, 2025, due to the previous year’s extraordinary release of College Football 25. Despite this, titles like Madden NFL 26 and Apex Legends showed net bookings growth, indicating strong player engagement. EA also announced a definitive agreement to be acquired by an investor consortium for approximately $55 billion, pending regulatory and stockholder approval.

The most recent analyst rating on (EA) stock is a Hold with a $210.00 price target. To see the full list of analyst forecasts on Electronic Arts stock, see the EA Stock Forecast page.