Electronic Arts (EA) AI Stock Analysis

• Market Cap: $36.84B
• Dividend Yield: 0.52%
• Average Volume (3M): 3.10M
• Price to Earnings (P/E): 34.6
• Beta (1Y): 0.52
• Revenue Growth: -0.81%
• EPS Growth: -9.28%
• Country: US
• Employees: 13,700
• Sector: Communication Services
• Sector Strength: 93
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 1.35
• Shares Outstanding: 250,765,980
• 10 Day Avg. Volume: 3,347,048
• 30 Day Avg. Volume: 3,098,177
• 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: $168.83
• Price Target Upside: 14.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 76 Outperform
• Price Target: $169.00 ▲(15.04%Upside)

Electronic Arts demonstrates strong financial performance and positive technical indicators, yet a high valuation and mixed earnings call outcomes suggest caution. The company's strategic initiatives and successes in key franchises balance the outlook, supporting a moderately positive stock score.

Positive Factors

Long-term Growth

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

Market Position

EA has a dominant position in sports games with a robust game pipeline ahead, driving future 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.

Game Releases

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 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: 146.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 146.91 is below the 20-day moving average (MA) of 150.05, above the 50-day MA of 145.82, and above the 200-day MA of 145.04, indicating a neutral trend. The MACD of 0.80 indicates Positive momentum. The RSI at 47.27 is Neutral, neither overbought nor oversold. The STOCH value of 6.99 is Positive, 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	$76.61B	17.85	23.93%	2.15%	1.26%	6.84%
EA	76 Outperform	$36.84B	34.60	16.13%	0.52%	-0.81%	-9.28%
RBLX	73 Outperform	$55.80B	―	-460.30%	―	30.24%	27.61%
BIDU	68 Neutral	$29.74B	8.31	9.85%	―	-1.33%	32.92%
PLTK	63 Neutral	$1.69B	12.03	-220.61%	8.87%	1.64%	-32.31%
Sector *	61 Neutral	$14.08B	5.95	-4.18%	3.68%	2.79%	-36.29%
TTWO	57 Neutral	$40.15B	―	-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.