Electronic Arts Inc
Exchange: NASDAQSector: Communication ServicesIndustry: Electronic Gaming & Multimedia
Electronic Arts is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers. In fiscal year 2024, EA posted GAAP net revenue of approximately $7.6 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS™ Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1®.
Current Price
$201.59
-0.05%GoodMoat Value
$149.91
25.6% overvaluedProfile
Valuation (TTM)
Market Cap$50.45B
P/E56.88
EV$49.15B
P/B7.46
Shares Out250.25M
P/Sales6.70
Revenue$7.53B
EV/EBITDA32.57
Electronic Arts Inc (EA) Stock Analysis
GoodMoat Analysis
Electronic Arts is a major video game publisher with a portfolio of strong sports and action franchises, but it currently fails the value investing gate due to a low moat score and an unfavourable valuation. The stock trades at a significant premium to the GoodMoat target price, suggesting a lack of margin of safety.
Read full analysis
Electronic Arts Inc (EA) is a leading global interactive entertainment company that develops, markets, and publishes video games across major franchises like FIFA (now EA Sports FC), Madden NFL, Battlefield, and Apex Legends. From a value investing perspective, the initial analysis is unfavourable. Applying the GoodMoat Investment Framework, the company likely struggles to achieve a strong moat score. While it possesses elements of brand strength in specific sports niches, it faces intense competition, high disruption risk from new platforms and business models, and limited pricing power, making a score of 5+ on the 14-point moat scale challenging. This weakens the business's long-term defensibility. Financially, the company shows mixed signals with a solid operating margin of 20.4% but anemic revenue growth of just 1.0% YoY. Crucially, the valuation appears extreme. The current P/E of 74x is very high, especially for a low-growth company, and the stock price of $202.34 is approximately 85% above the GoodMoat target of $109.45. This indicates a deeply unfavourable margin of safety according to the framework's DCF bands. Following the Decision Framework, the combination of a likely low moat score and a severe overvaluation relative to the target price means the stock fails the initial gate. For a value investor, this suggests the business does not currently meet the criteria of a high-quality company trading at an attractive price, warranting significant caution. Analysis based on data as of 2024-05-15.
Market Cap$50.45B
Current Price$201.59
P/E Ratio56.88
Forward P/E—
PEG Ratio0.67
EPS$3.51
Book Value$27.03
P/B Ratio7.46
EA Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 5.8% FCF growth (CAGR)
Cash vs Debt
Net Cash: 1.4B
Revenue
5.5B
FY20
5.6B
FY21
7.0B
FY22
7.4B
FY23
7.6B
FY24
7.5B
FY25
7.5B
FY26
Net Income
3.0B
FY20
837M
FY21
789M
FY22
802M
FY23
1.3B
FY24
1.1B
FY25
887M
FY26
EA 52-Week Range
$142.42
$204.60
50-Day MA: $201.89200-Day MA: $195.95
Did you know?
Profit margin stands at 11.8%.
Electronic Arts Inc (EA) Financial Summary
Electronic Arts Inc (EA) is a Communication Services company in the Electronic Gaming & Multimedia industry, listed on NASDAQ. The stock currently trades at $201.59 with a market capitalization of $50.45B.
Key valuation metrics include a P/E ratio of 56.88, price-to-book ratio of 7.46, and EPS of $3.51. The company reports a profit margin of 11.8% and return on equity of 13.1%.
EA Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $50.45B |
| P/E Ratio | 56.88 |
| EPS | $3.51 |
| P/B Ratio | 7.46 |
| P/S Ratio | 6.70 |
| EV/EBITDA | 32.57 |
| Dividend Yield | 0.38% |
| Profit Margin | 11.8% |
| Return on Equity | 13.1% |
| Debt/Equity | 0.22 |
EA Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY20 | $5.54B | $3.04B |
| FY21 | $5.63B | $837.00M |
| FY22 | $6.99B | $789.00M |
| FY23 | $7.43B | $802.00M |
| FY24 | $7.56B | $1.27B |
| FY25 | $7.46B | $1.12B |
| FY26 | $7.53B | $887.00M |
Electronic Arts Inc (EA) Valuation
Based on GoodMoat's DCF model, Electronic Arts Inc has a fair value estimate of $149.91. At the current price of $201.59, the stock appears 34.5% overvalued relative to our intrinsic value estimate.
EA Quality Indicators
Electronic Arts Inc maintains a profit margin of 11.8% and an operating margin of 15.4%. Return on equity stands at 13.1%. The current ratio is 1.05. Debt-to-equity ratio is 0.22.
About Electronic Arts Inc
Electronic Arts is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers. In fiscal year 2024, EA posted GAAP net revenue of approximately $7.6 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS FC™, Battlefield™, Apex Legends™, The Sims™, EA SPORTS™ Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and EA SPORTS F1®.
EA Free Cash Flow
Electronic Arts Inc generated $2.32B in trailing twelve-month free cash flow, representing an FCF yield of 4.60%. This moderate FCF yield indicates reasonable cash generation.
EA Shares Outstanding
Electronic Arts Inc has 0.25 billion shares outstanding at a share price of $201.59, giving it a market capitalization of $50.45B.
EA Recent Insider Trades
Recent insider transactions at Electronic Arts Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Wilson Andrew (Chairman & CEO) | SELL | 2,240 | $450481.92 |
| Wilson Andrew (Chairman & CEO) | SELL | 5,000 | $1.00M |
| Singh Vijayanthimala (Chief People Officer) | SELL | 1,200 | $240972.00 |