Electronic Arts (EA) AI Stock Analysis

• Market Cap: $39.66B
• Dividend Yield: 0.48%
• Average Volume (3M): 3.09M
• Price to Earnings (P/E): 37.2
• Beta (1Y): 0.51
• Revenue Growth: -0.81%
• EPS Growth: -9.28%
• Country: US
• Employees: 13,700
• Sector: Communication Services
• Sector Strength: 88
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 1.35
• Shares Outstanding: 251,271,880
• 10 Day Avg. Volume: 2,892,583
• 30 Day Avg. Volume: 3,093,262
• PEG Ratio: 4.81
• Price to Book (P/B): 6.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.32
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.27
• Enterprise Value/Gross Profit: 6.37
• Enterprise Value/Ebitda: 5.10
• 1Y Price Target: $170.76
• Price Target Upside: 8.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 70 Outperform
• Price Target: $160.00 ▲(1.44%Upside)

Electronic Arts shows strong financial performance and a positive outlook from its earnings call, driven by robust growth in key franchises and strategic investments. However, high valuation metrics and mixed technical indicators suggest caution. The company's ability to sustain growth amid challenges in some segments will be crucial for future performance.

Positive Factors

Future Growth

Accelerated adoption of digital games and live services is expected to benefit long-term growth.

Sales Performance

Split Fiction’s launch exceeded internal expectations, selling almost double EA’s original forecast.

Shareholder Returns

EA announced an accelerated stock repurchase program, increasing total shareholder return.

Negative Factors

Competition

There is a risk of more intense competition in the gaming industry post-pandemic, which may lead to slower revenue growth.

Game Performance

The magnitude of Apex Legends’ decline was surprising, leading to a significant headwind on total Bookings.

Product Concerns

There is caution on the success of the upcoming Battlefield due to CoD’s increased dominance in the Shooter category.

Electronic Arts Business Overview & Revenue Model

Company Description

Electronic Arts Inc. (EA) is a leading global interactive entertainment company known for developing, publishing, and distributing video games and related content. Founded in 1982 and headquartered in Redwood City, California, EA operates in the video game industry, focusing on creating high-quality games for consoles, PCs, and mobile devices. The company's core products include popular franchises such as FIFA, Madden NFL, The Sims, and Battlefield, which are enjoyed by millions of players worldwide.

How the Company Makes Money

Electronic Arts makes money primarily through the sale of video games and associated content. The company's revenue streams include full game sales, live services, and mobile platforms. Full game sales involve the sale of physical and digital copies of EA's games. Live services encompass additional content such as downloadable content (DLC), in-game purchases, and subscription services like EA Play, which provide ongoing revenue beyond the initial game sale. Mobile gaming also represents a significant income source, with EA developing and monetizing games for smartphones and tablets. Key partnerships with sports organizations like FIFA and the NFL enhance EA's portfolio, allowing it to produce exclusive licensed sports games, further contributing to its earnings.

Electronic Arts Financial Statement Overview

Summary

Electronic Arts exhibits strong financial health with consistent revenue and profit growth. The company maintains high profitability and effective cost management, as seen in its strong gross and net profit margins. The balance sheet reflects stability with low leverage, though a slight decline in stockholders' equity warrants monitoring. Robust operating cash flow highlights strong cash generation capabilities despite a decrease in free cash flow.

Income Statement

Electronic Arts shows strong financial performance with consistent revenue and profit growth over the years. The gross profit margin remains healthy at 79%, and the net profit margin is solid at 15% TTM. Although there was a slight decline in revenue compared to the previous year, the company maintains strong profitability with high EBIT and EBITDA margins, indicating effective cost management and operational efficiency.

Balance Sheet

The balance sheet of Electronic Arts is stable, with a healthy equity ratio of 52% TTM, indicating strong financial stability. The debt-to-equity ratio is low at 0.23, demonstrating prudent financial leverage. However, a slight decline in stockholders' equity over the past year suggests careful monitoring is needed. Overall, the company's assets are well-managed, supporting long-term sustainability.

Cash Flow

Cash flow analysis shows robust operating cash flow, with a high operating cash flow to net income ratio of 1.85 TTM, signifying strong cash generation capability. However, the free cash flow has decreased by 12% from the previous year, which could indicate potential challenges in maintaining cash reserves for future investments. Nevertheless, the company effectively manages its capital expenditures, contributing to its sound cash flow position.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.46B	7.56B	7.43B	6.99B	5.63B
Gross Profit	5.92B	5.85B	5.63B	5.13B	4.13B
EBITDA	1.52B	1.99B	1.81B	1.61B	1.23B
Net Income	1.12B	1.27B	802.00M	789.00M	837.00M
Balance Sheet
Total Assets	12.37B	13.42B	13.46B	13.80B	13.29B
Cash, Cash Equivalents and Short-Term Investments	2.25B	3.26B	2.77B	3.06B	6.37B
Total Debt	1.95B	1.95B	1.88B	1.96B	1.88B
Total Liabilities	5.98B	5.91B	6.17B	6.17B	5.45B
Stockholders Equity	6.39B	7.51B	7.29B	7.63B	7.84B
Cash Flow
Free Cash Flow	1.86B	2.12B	1.34B	1.71B	1.81B
Operating Cash Flow	2.08B	2.31B	1.55B	1.90B	1.93B
Investing Cash Flow	37.00M	-207.00M	-217.00M	-2.80B	-505.00M
Financing Cash Flow	-2.86B	-1.62B	-1.60B	-1.62B	-15.00M

Electronic Arts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 157.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 157.73 is above the 20-day moving average (MA) of 149.79, above the 50-day MA of 148.87, and above the 200-day MA of 145.12, indicating a bullish trend. The MACD of 2.38 indicates Negative momentum. The RSI at 67.98 is Neutral, neither overbought nor oversold. The STOCH value of 92.17 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	85 Outperform	$83.84B	19.12	23.93%	2.03%	1.26%	6.84%
BIDU	73 Outperform	$30.52B	8.57	9.85%	―	-1.33%	32.92%
RBLX	72 Outperform	$69.75B	―	-460.30%	―	30.24%	27.61%
EA	70 Outperform	$39.66B	37.17	16.13%	0.48%	-0.81%	-9.28%
Sector *	66 Neutral	¥363.28B	13.70	2.32%	2.55%	5.41%	-19.11%
PLTK	63 Neutral	$1.81B	12.69	-220.61%	8.30%	1.64%	-32.31%
TTWO	57 Neutral	$42.87B	―	-114.76%	―	5.31%	-15.57%

Electronic Arts Corporate Events

EA Declares Cash Dividend Amid Strong Financial Results

On May 1, 2025, EA’s Audit Committee declared a cash dividend of $0.19 per share, payable on June 18, 2025. EA reported strong financial results for the fiscal year ending March 31, 2025, with net bookings totaling $7.355 billion and net revenue of $7.463 billion. The success of EA SPORTS and The Sims contributed to a record year, positioning the company for growth with upcoming releases like Battlefield in FY26. EA also repurchased 17.6 million shares for $2.5 billion during the fiscal year.