ELECTRONIC ARTS INC (EA) Stock Fundamental Analysis
USA - NASDAQ:EA - US2855121099 - Common Stock
202.685 USD
+9.34 (+4.83%)
We assign a fundamental rating of 6 out of 10 to EA. EA was compared to 80 industry peers in the Entertainment industry. EA scores excellent points on both the profitability and health parts. This is a solid base for a good stock. EA has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
EA had positive earnings in the past year.
In the past year EA had a positive cash flow from operations.
In the past 5 years EA has always been profitable.
EA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.91%, EA belongs to the top of the industry, outperforming 88.75% of the companies in the same industry.
With an excellent Return On Equity value of 17.13%, EA belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
EA has a better Return On Invested Capital (12.83%) than 90.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EA is above the industry average of 9.25%.
The last Return On Invested Capital (12.83%) for EA is above the 3 year average (12.06%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.91% | ||
| ROE | 17.13% | ||
| ROIC | 12.83% |
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
Looking at the Profit Margin, with a value of 13.94%, EA belongs to the top of the industry, outperforming 91.25% of the companies in the same industry.
EA's Profit Margin has declined in the last couple of years.
EA has a Operating Margin of 19.83%. This is amongst the best in the industry. EA outperforms 92.50% of its industry peers.
In the last couple of years the Operating Margin of EA has declined.
EA has a Gross Margin of 79.14%. This is amongst the best in the industry. EA outperforms 91.25% of its industry peers.
EA's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.83% | ||
| PM (TTM) | 13.94% | ||
| GM | 79.14% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EA is still creating some value.
EA has less shares outstanding than it did 1 year ago.
EA has less shares outstanding than it did 5 years ago.
The debt/assets ratio for EA is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 6.92 indicates that EA is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.92, EA belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
The Debt to FCF ratio of EA is 1.08, which is an excellent value as it means it would take EA, only 1.08 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of EA (1.08) is better than 81.25% of its industry peers.
EA has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
EA has a Debt to Equity ratio (0.24) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 6.92 |
ROIC/WACC1.49
WACC8.59%
2.3 Liquidity
EA has a Current Ratio of 0.84. This is a bad value and indicates that EA is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.84, EA is not doing good in the industry: 61.25% of the companies in the same industry are doing better.
A Quick Ratio of 0.84 indicates that EA may have some problems paying its short term obligations.
EA has a Quick ratio of 0.84. This is comparable to the rest of the industry: EA outperforms 41.25% of its industry peers.
EA 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 | 0.84 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.06% over the past year.
The Earnings Per Share has been growing slightly by 6.84% on average over the past years.
The Revenue has been growing slightly by 2.41% in the past year.
Measured over the past years, EA shows a small growth in Revenue. The Revenue has been growing by 6.15% on average per year.
EPS 1Y (TTM)2.06%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-51.92%
Revenue 1Y (TTM)2.41%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%2.85%
3.2 Future
Based on estimates for the next years, EA will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.25% on average per year.
EA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.40% yearly.
EPS Next Y26.96%
EPS Next 2Y17.76%
EPS Next 3Y15.17%
EPS Next 5Y9.25%
Revenue Next Year10.5%
Revenue Next 2Y7.58%
Revenue Next 3Y6.58%
Revenue Next 5Y4.4%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 31.47 indicates a quite expensive valuation of EA.
Compared to the rest of the industry, the Price/Earnings ratio of EA indicates a somewhat cheap valuation: EA is cheaper than 80.00% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.54. EA is around the same levels.
With a Price/Forward Earnings ratio of 21.78, EA is valued on the expensive side.
Based on the Price/Forward Earnings ratio, EA is valued cheaply inside the industry as 85.00% of the companies are valued more expensively.
EA is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.05, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.47 | ||
| Fwd PE | 21.78 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EA is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, EA is valued cheaply inside the industry as 83.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.98 | ||
| EV/EBITDA | 26.41 |
4.3 Compensation for Growth
EA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EA has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as EA's earnings are expected to grow with 15.17% in the coming years.
PEG (NY)1.17
PEG (5Y)4.6
EPS Next 2Y17.76%
EPS Next 3Y15.17%
5. Dividend
5.1 Amount
With a yearly dividend of 0.45%, EA is not a good candidate for dividend investing.
EA's Dividend Yield is rather good when compared to the industry average which is at 21.21. EA pays more dividend than 81.25% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, EA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.45% |
5.2 History
EA has been paying a dividend for over 5 years, so it has already some track record.
EA has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
18.91% of the earnings are spent on dividend by EA. This is a low number and sustainable payout ratio.
DP18.91%
EPS Next 2Y17.76%
EPS Next 3Y15.17%
NASDAQ:EA (9/29/2025, 10:05:10 AM)
202.685
+9.34 (+4.83%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners103.56%
Inst Owner Change-0.35%
Ins Owners0.19%
Ins Owner Change2.38%
Market Cap50.71B
Analysts76
Price Target176.73 (-12.81%)
Short Float %3.39%
Short Ratio3.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.45% |
Yearly Dividend0.77
Dividend Growth(5Y)N/A
DP18.91%
Div Incr Years0
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)65.17%
Min EPS beat(2)7.97%
Max EPS beat(2)122.37%
EPS beat(4)3
Avg EPS beat(4)30.78%
Min EPS beat(4)-10.5%
Max EPS beat(4)122.37%
EPS beat(8)5
Avg EPS beat(8)17.91%
EPS beat(12)8
Avg EPS beat(12)14.56%
EPS beat(16)10
Avg EPS beat(16)16.44%
Revenue beat(2)1
Avg Revenue beat(2)4.92%
Min Revenue beat(2)-1.89%
Max Revenue beat(2)11.74%
Revenue beat(4)1
Avg Revenue beat(4)0.36%
Min Revenue beat(4)-7.44%
Max Revenue beat(4)11.74%
Revenue beat(8)1
Avg Revenue beat(8)-1.98%
Revenue beat(12)3
Avg Revenue beat(12)-3.05%
Revenue beat(16)5
Avg Revenue beat(16)-2.11%
PT rev (1m)0.41%
PT rev (3m)3.06%
EPS NQ rev (1m)0.38%
EPS NQ rev (3m)-39.92%
EPS NY rev (1m)2.01%
EPS NY rev (3m)1.32%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)-8.02%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.47 | ||
| Fwd PE | 21.78 | ||
| P/S | 6.79 | ||
| P/FCF | 28.98 | ||
| P/OCF | 25.66 | ||
| P/B | 8.34 | ||
| P/tB | 120.18 | ||
| EV/EBITDA | 26.41 |
EPS(TTM)6.44
EY3.18%
EPS(NY)9.31
Fwd EY4.59%
FCF(TTM)6.99
FCFY3.45%
OCF(TTM)7.9
OCFY3.9%
SpS29.87
BVpS24.31
TBVpS1.69
PEG (NY)1.17
PEG (5Y)4.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.91% | ||
| ROE | 17.13% | ||
| ROCE | 17.12% | ||
| ROIC | 12.83% | ||
| ROICexc | 15.81% | ||
| ROICexgc | 81.17% | ||
| OM | 19.83% | ||
| PM (TTM) | 13.94% | ||
| GM | 79.14% | ||
| FCFM | 23.41% |
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 Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Debt/EBITDA | 0.81 | ||
| Cap/Depr | 63.66% | ||
| Cap/Sales | 3.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 107.57% | ||
| Profit Quality | 167.95% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 6.92 |
F-Score7
WACC8.59%
ROIC/WACC1.49
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)2.06%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-51.92%
EPS Next Y26.96%
EPS Next 2Y17.76%
EPS Next 3Y15.17%
EPS Next 5Y9.25%
Revenue 1Y (TTM)2.41%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%2.85%
Revenue Next Year10.5%
Revenue Next 2Y7.58%
Revenue Next 3Y6.58%
Revenue Next 5Y4.4%
EBIT growth 1Y0.61%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.3%
EBIT Next 3Y15.72%
EBIT Next 5Y11.34%
FCF growth 1Y-2.45%
FCF growth 3Y2.79%
FCF growth 5Y2.32%
OCF growth 1Y-0.55%
OCF growth 3Y3.06%
OCF growth 5Y2.96%