Electronic Arts (EA) AI Stock Analysis

• Market Cap: $51.00B
• Dividend Yield: 0.37%
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 59.6
• 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: 1,781,051
• 30 Day Avg. Volume: 2,043,709
• 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: $203.63
• Price Target Upside: -0.14% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 18
• EPS Forecast (FY): 8.56
• Revenue Forecast (FY): $8.07B

• Rating: 68 Neutral
• Price Target: $222.00 ▲(8.87% Upside)

The overall stock score reflects a mix of solid financial performance and a significant corporate event. The acquisition deal provides a substantial premium and growth potential, but high valuation and technical indicators suggest caution. Investors should consider the overbought technical signals and high P/E ratio when evaluating EA's stock.

Positive Factors

Acquisition Deal

The acquisition by a consortium led by Saudi Arabia's PIF for $55 billion is expected to accelerate EA's innovation and growth, providing a strategic advantage and financial backing for future expansion.

Strong Game Franchises

EA's strong game franchises like 'Battlefield 6' and 'EA Sports FC 26' maintain top sales positions, indicating sustained consumer demand and brand strength, which supports long-term revenue stability.

Stable Balance Sheet

A stable balance sheet with low leverage provides EA with financial flexibility to invest in growth opportunities and weather economic uncertainties, supporting long-term operational stability.

Negative Factors

Negative Revenue Growth

Recent declines in revenue growth suggest potential challenges in maintaining top-line expansion, which could impact EA's ability to sustain its market position and profitability over time.

Decline in Free Cash Flow

A decline in free cash flow growth indicates potential cash management issues, which could limit EA's ability to fund new projects and return capital to shareholders, affecting long-term financial health.

Decline in Stockholders' Equity

A decline in stockholders' equity could signal weakening financial health, potentially impacting EA's ability to raise capital and invest in growth initiatives, posing risks to long-term sustainability.

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: 203.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• 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 203.92 is above the 20-day moving average (MA) of 201.71, above the 50-day MA of 200.75, and above the 200-day MA of 164.40, indicating a bullish trend. The MACD of 1.39 indicates Positive momentum. The RSI at 74.90 is Negative, neither overbought nor oversold. The STOCH value of 95.22 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	81 Outperform	$86.02B	17.86	24.65%	2.17%	5.69%	32.87%
EA	68 Neutral	$51.00B	59.60	13.20%	0.37%	-1.45%	-11.99%
PLTK	65 Neutral	$1.59B	18.34	―	9.43%	7.49%	-60.32%
BILI	62 Neutral	$10.83B	100.58	5.30%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TTWO	54 Neutral	$45.80B	―	-86.61%	―	13.98%	-6.71%
RBLX	50 Neutral	$67.58B	―	-324.24%	―	32.70%	12.57%

Electronic Arts Corporate Events

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.

Electronic Arts Announces $55 Billion Acquisition Deal

On September 28, 2025, Electronic Arts announced an agreement to be acquired by a consortium including PIF, Silver Lake, and Affinity Partners in an all-cash transaction valued at approximately $55 billion. This acquisition, approved by EA’s Board of Directors, offers a 25% premium on EA’s share price and represents the largest all-cash sponsor take-private investment in history. The transaction aims to accelerate EA’s innovation and growth in the entertainment industry, with the company continuing to be led by CEO Andrew Wilson. The deal is expected to close in Q1 FY27, subject to regulatory and stockholder approvals, after which EA’s stock will be delisted from public markets.