Electronic Arts (EA) AI Stock Analysis

• Market Cap: $37.23B
• Dividend Yield: 0.51%
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 34.8
• Beta (1Y): 0.51
• Revenue Growth: -0.81%
• EPS Growth: -9.28%
• Country: US
• Employees: 13,700
• Sector: Communication Services
• Sector Strength: 83
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 1.35
• Shares Outstanding: 250,765,980
• 10 Day Avg. Volume: 3,173,597
• 30 Day Avg. Volume: 3,284,660
• PEG Ratio: 36.98
• Price to Book (P/B): 5.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.81
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $170.18
• Price Target Upside: 15.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

• Rating: 70 Outperform
• Price Target: $160.00 ▲(8.20%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

Long-term Growth

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

Shareholder Return

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.

Pricing Strategy

EA’s guidance contemplates that retail game prices will remain at $70 for Xbox Series and PS5 releases, with a high likelihood of raising prices for all new releases by $10 at retail.

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

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 shows strong financial health with solid profitability, efficient equity use, and robust cash generation. The income statement reveals strong profitability margins, although revenue growth is moderate. The balance sheet remains stable with prudent leverage, and cash flow metrics indicate strong cash generation despite some recent pressures.

Income Statement

Electronic Arts demonstrates strong profitability with a consistent gross profit margin and net profit margin over the years. The TTM (Trailing-Twelve-Months) data shows a gross profit margin of approximately 78.35% and a net profit margin of 14.28%, indicating efficient cost management. Revenue growth has been moderate, with a slight decline noted in the latest TTM compared to the previous annual report. EBIT and EBITDA margins are healthy, reflecting robust operational performance.

Balance Sheet

The company maintains a stable balance sheet with a debt-to-equity ratio of 0.25 in TTM, indicating prudent leverage levels. The return on equity is solid at 14.15%, showcasing effective use of shareholder funds. However, the equity ratio of 55.10% suggests a moderate dependence on liabilities, which is typical for the industry but may pose risks if liabilities grow significantly.

Cash Flow

Electronic Arts has demonstrated strong cash flow generation with a substantial free cash flow growth rate of 40.85% in the latest annual period, although it shows a decline in the TTM. The operating cash flow to net income ratio is approximately 2.01 in TTM, indicating excellent conversion of earnings into cash. However, the free cash flow to net income ratio shows a decrease in TTM, suggesting potential pressures on free cash flow sustainability.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
7.34B	7.56B	7.43B	6.99B	5.63B	5.54B
	Gross Profit
5.75B	5.85B	5.63B	5.13B	4.13B	4.17B
	EBIT
1.45B	1.52B	1.33B	1.13B	1.05B	1.45B
	EBITDA
1.90B	1.99B	1.81B	1.61B	1.23B	1.70B
	Net Income Common Stockholders
1.05B	1.27B	802.00M	789.00M	837.00M	3.04B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.15B	3.26B	2.77B	3.06B	6.37B	5.74B
	Total Assets
13.45B	13.42B	13.46B	13.80B	13.29B	11.11B
	Total Debt
1.95B	1.95B	1.88B	1.96B	1.88B	996.00M
	Net Debt
-827.00M	-952.00M	-544.00M	-773.00M	-3.38B	-2.77B
	Total Liabilities
6.04B	5.91B	6.17B	6.17B	5.45B	3.65B
	Stockholders Equity
7.41B	7.51B	7.29B	7.63B	7.84B	7.46B
Cash Flow		Free Cash Flow
1.89B	2.12B	1.34B	1.71B	1.81B	1.66B
	Operating Cash Flow
2.11B	2.31B	1.55B	1.90B	1.93B	1.80B
	Investing Cash Flow
-226.00M	-207.00M	-217.00M	-2.80B	-505.00M	-1.36B
	Financing Cash Flow
-1.81B	-1.62B	-1.60B	-1.62B	-15.00M	-1.36B

Electronic Arts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 147.88
• 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 147.88 is below the 20-day moving average (MA) of 148.42, above the 50-day MA of 146.03, and above the 200-day MA of 144.84, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 68.67 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	79 Outperform	$78.58B	18.11	23.93%	2.19%	1.26%	6.84%
RBLX	73 Outperform	$61.01B	―	-460.30%	―	30.24%	27.61%
EA	70 Outperform	$37.23B	34.83	16.13%	0.51%	-0.81%	-9.28%
BIDU	68 Neutral	$29.35B	8.42	9.85%	―	-1.33%	32.92%
PLTK	63 Neutral	$1.82B	13.01	-220.61%	8.23%	1.64%	-32.31%
Sector *	61 Neutral	$14.20B	5.93	-4.31%	3.70%	2.75%	-35.73%
TTWO	57 Neutral	$40.75B	―	-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.