ELECTRONIC ARTS INC (1EA.MI) Stock Fundamental Analysis
BIT:1EA - Euronext Milan - US2855121099 - Common Stock - Currency: EUR
We assign a fundamental rating of 6 out of 10 to 1EA. 1EA was compared to 46 industry peers in the Entertainment industry. 1EA has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. 1EA is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
1EA had positive earnings in the past year.
1EA had a positive operating cash flow in the past year.
1EA had positive earnings in each of the past 5 years.
Each year in the past 5 years 1EA had a positive operating cash flow.
1.2 Ratios
1EA's Return On Assets of 9.06% is amongst the best of the industry. 1EA outperforms 85.71% of its industry peers.
1EA has a Return On Equity of 17.55%. This is in the better half of the industry: 1EA outperforms 73.47% of its industry peers.
1EA has a better Return On Invested Capital (13.27%) than 83.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for 1EA is above the industry average of 9.33%.
The 3 year average ROIC (12.06%) for 1EA is below the current ROIC(13.27%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.06% | ||
| ROE | 17.55% | ||
| ROIC | 13.27% |
ROA(3y)8.17%
ROA(5y)7.3%
ROE(3y)15.16%
ROE(5y)13.3%
ROIC(3y)12.06%
ROIC(5y)10.47%
1.3 Margins
1EA's Profit Margin of 15.02% is amongst the best of the industry. 1EA outperforms 83.67% of its industry peers.
In the last couple of years the Profit Margin of 1EA has declined.
With an excellent Operating Margin value of 21.13%, 1EA belongs to the best of the industry, outperforming 91.84% of the companies in the same industry.
In the last couple of years the Operating Margin of 1EA has declined.
With a decent Gross Margin value of 79.32%, 1EA is doing good in the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Gross Margin of 1EA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.13% | ||
| PM (TTM) | 15.02% | ||
| GM | 79.32% |
OM growth 3Y7.96%
OM growth 5Y-4.32%
PM growth 3Y10%
PM growth 5Y-22.83%
GM growth 3Y2.54%
GM growth 5Y1.05%
2. Health
2.1 Basic Checks
1EA has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for 1EA has been reduced compared to 1 year ago.
The number of shares outstanding for 1EA has been reduced compared to 5 years ago.
The debt/assets ratio for 1EA is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.57 indicates that 1EA is not in any danger for bankruptcy at the moment.
1EA has a Altman-Z score of 5.57. This is amongst the best in the industry. 1EA outperforms 89.80% of its industry peers.
1EA has a debt to FCF ratio of 1.01. This is a very positive value and a sign of high solvency as it would only need 1.01 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.01, 1EA belongs to the top of the industry, outperforming 87.76% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that 1EA is not too dependend on debt financing.
1EA's Debt to Equity ratio of 0.23 is fine compared to the rest of the industry. 1EA outperforms 67.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | 5.57 |
ROIC/WACC1.5
WACC8.82%
2.3 Liquidity
1EA has a Current Ratio of 0.95. This is a bad value and indicates that 1EA is not financially healthy enough and could expect problems in meeting its short term obligations.
1EA's Current ratio of 0.95 is in line compared to the rest of the industry. 1EA outperforms 57.14% of its industry peers.
A Quick Ratio of 0.95 indicates that 1EA may have some problems paying its short term obligations.
1EA has a Quick ratio of 0.95. This is comparable to the rest of the industry: 1EA outperforms 57.14% of its industry peers.
1EA does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The earnings per share for 1EA have decreased by -3.17% in the last year.
The Earnings Per Share has been growing slightly by 6.84% on average over the past years.
The Revenue has decreased by -1.31% in the past year.
Measured over the past years, 1EA shows a small growth in Revenue. The Revenue has been growing by 6.15% on average per year.
EPS 1Y (TTM)-3.17%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-11.68%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%7.98%
3.2 Future
The Earnings Per Share is expected to grow by 9.25% on average over the next years. This is quite good.
1EA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.10% yearly.
EPS Next Y25.33%
EPS Next 2Y17.52%
EPS Next 3Y15.08%
EPS Next 5Y9.25%
Revenue Next Year9.69%
Revenue Next 2Y7.62%
Revenue Next 3Y6.56%
Revenue Next 5Y4.1%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.69, which indicates a rather expensive current valuation of 1EA.
Based on the Price/Earnings ratio, 1EA is valued a bit cheaper than the industry average as 73.47% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of 1EA to the average of the S&P500 Index (26.35), we can say 1EA is valued inline with the index average.
With a Price/Forward Earnings ratio of 18.11, 1EA is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of 1EA indicates a somewhat cheap valuation: 1EA is cheaper than 67.35% of the companies listed in the same industry.
1EA's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.69 | ||
| Fwd PE | 18.11 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as 1EA.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1EA indicates a somewhat cheap valuation: 1EA is cheaper than 65.31% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.56 | ||
| EV/EBITDA | 19.52 |
4.3 Compensation for Growth
1EA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of 1EA may justify a higher PE ratio.
A more expensive valuation may be justified as 1EA's earnings are expected to grow with 15.08% in the coming years.
PEG (NY)0.9
PEG (5Y)3.32
EPS Next 2Y17.52%
EPS Next 3Y15.08%
5. Dividend
5.1 Amount
1EA has a yearly dividend return of 0.50%, which is pretty low.
Compared to an average industry Dividend Yield of 2.89, 1EA pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, 1EA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
17.75% of the earnings are spent on dividend by 1EA. This is a low number and sustainable payout ratio.
DP17.75%
EPS Next 2Y17.52%
EPS Next 3Y15.08%
BIT:1EA (5/12/2025, 7:00:00 PM)
134.8
+7.58 (+5.96%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners102.38%
Inst Owner ChangeN/A
Ins Owners0.18%
Ins Owner ChangeN/A
Market Cap33.80B
Analysts74.74
Price Target136.01 (0.9%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
Yearly Dividend0.68
Dividend Growth(5Y)N/A
DP17.75%
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.26%
Min EPS beat(2)-10.5%
Max EPS beat(2)7.97%
EPS beat(4)3
Avg EPS beat(4)5.46%
Min EPS beat(4)-10.5%
Max EPS beat(4)21.09%
EPS beat(8)5
Avg EPS beat(8)3.61%
EPS beat(12)8
Avg EPS beat(12)9.46%
EPS beat(16)10
Avg EPS beat(16)9.74%
Revenue beat(2)1
Avg Revenue beat(2)2.15%
Min Revenue beat(2)-7.44%
Max Revenue beat(2)11.74%
Revenue beat(4)1
Avg Revenue beat(4)-0.32%
Min Revenue beat(4)-7.44%
Max Revenue beat(4)11.74%
Revenue beat(8)3
Avg Revenue beat(8)1.09%
Revenue beat(12)6
Avg Revenue beat(12)2.01%
Revenue beat(16)8
Avg Revenue beat(16)0.49%
PT rev (1m)-1.79%
PT rev (3m)-5.48%
EPS NQ rev (1m)-80.18%
EPS NQ rev (3m)-79.56%
EPS NY rev (1m)9.41%
EPS NY rev (3m)9.76%
Revenue NQ rev (1m)-2.36%
Revenue NQ rev (3m)-2.8%
Revenue NY rev (1m)3.09%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.69 | ||
| Fwd PE | 18.11 | ||
| P/S | 5.12 | ||
| P/FCF | 20.56 | ||
| P/OCF | 18.38 | ||
| P/B | 5.98 | ||
| P/tB | 53.28 | ||
| EV/EBITDA | 19.52 |
EPS(TTM)5.94
EY4.41%
EPS(NY)7.44
Fwd EY5.52%
FCF(TTM)6.56
FCFY4.86%
OCF(TTM)7.34
OCFY5.44%
SpS26.33
BVpS22.53
TBVpS2.53
PEG (NY)0.9
PEG (5Y)3.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.06% | ||
| ROE | 17.55% | ||
| ROCE | 17.7% | ||
| ROIC | 13.27% | ||
| ROICexc | 17.75% | ||
| ROICexgc | 119.2% | ||
| OM | 21.13% | ||
| PM (TTM) | 15.02% | ||
| GM | 79.32% | ||
| FCFM | 24.9% |
ROA(3y)8.17%
ROA(5y)7.3%
ROE(3y)15.16%
ROE(5y)13.3%
ROIC(3y)12.06%
ROIC(5y)10.47%
ROICexc(3y)16.76%
ROICexc(5y)16.45%
ROICexgc(3y)98.03%
ROICexgc(5y)99%
ROCE(3y)16.08%
ROCE(5y)13.96%
ROICexcg growth 3Y5.86%
ROICexcg growth 5Y-3.33%
ROICexc growth 3Y13.37%
ROICexc growth 5Y-15.13%
OM growth 3Y7.96%
OM growth 5Y-4.32%
PM growth 3Y10%
PM growth 5Y-22.83%
GM growth 3Y2.54%
GM growth 5Y1.05%
F-Score7
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 62.08% | ||
| Cap/Sales | 2.96% | ||
| Interest Coverage | 28.16 | ||
| Cash Conversion | 107.55% | ||
| Profit Quality | 165.75% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 5.57 |
F-Score7
WACC8.82%
ROIC/WACC1.5
Cap/Depr(3y)49.99%
Cap/Depr(5y)51.43%
Cap/Sales(3y)2.79%
Cap/Sales(5y)2.65%
Profit Quality(3y)166.47%
Profit Quality(5y)186.51%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.17%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-11.68%
EPS Next Y25.33%
EPS Next 2Y17.52%
EPS Next 3Y15.08%
EPS Next 5Y9.25%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%7.98%
Revenue Next Year9.69%
Revenue Next 2Y7.62%
Revenue Next 3Y6.56%
Revenue Next 5Y4.1%
EBIT growth 1Y-4.42%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.25%
EBIT Next 3Y14.95%
EBIT Next 5Y10.78%
FCF growth 1Y-12.19%
FCF growth 3Y2.79%
FCF growth 5Y2.32%
OCF growth 1Y-10.19%
OCF growth 3Y3.06%
OCF growth 5Y2.96%