ELECTRONIC ARTS INC (EA) Stock Fundamental Analysis
NASDAQ:EA - US2855121099 - Common Stock
169.24 USD
+0.62 (+0.37%)
Overall EA gets a fundamental rating of 6 out of 10. We evaluated EA against 79 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.
EA had a positive operating cash flow in the past year.
In the past 5 years EA has always been profitable.
Each year in the past 5 years EA had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 8.91%, EA belongs to the best of the industry, outperforming 88.61% of the companies in the same industry.
Looking at the Return On Equity, with a value of 17.13%, EA belongs to the top of the industry, outperforming 87.34% of the companies in the same industry.
The Return On Invested Capital of EA (12.83%) is better than 88.61% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EA is significantly below the industry average of 20.67%.
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
EA has a Profit Margin of 13.94%. This is amongst the best in the industry. EA outperforms 91.14% of its industry peers.
EA's Profit Margin has declined in the last couple of years.
The Operating Margin of EA (19.83%) is better than 92.41% of its industry peers.
EA's Operating Margin has declined in the last couple of years.
EA has a Gross Margin of 79.14%. This is amongst the best in the industry. EA outperforms 91.14% 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.
The number of shares outstanding for EA has been reduced compared to 5 years ago.
The debt/assets ratio for EA is higher compared to a year ago.
2.2 Solvency
EA has an Altman-Z score of 6.28. This indicates that EA is financially healthy and has little risk of bankruptcy at the moment.
EA has a better Altman-Z score (6.28) than 84.81% of its industry peers.
EA has a debt to FCF ratio of 1.08. This is a very positive value and a sign of high solvency as it would only need 1.08 years to pay back of all of its debts.
EA's Debt to FCF ratio of 1.08 is amongst the best of the industry. EA outperforms 81.01% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that EA is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.24, EA is in line with its industry, outperforming 55.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 6.28 |
ROIC/WACC1.52
WACC8.46%
2.3 Liquidity
A Current Ratio of 0.84 indicates that EA may have some problems paying its short term obligations.
The Current ratio of EA (0.84) is worse than 62.03% of its industry peers.
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 40.51% of its industry peers.
The current and quick ratio evaluation for EA is rather negative, while it does have 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
EA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.06%.
The Earnings Per Share has been growing slightly by 6.84% on average over the past years.
EA shows a small growth in Revenue. In the last year, the Revenue has grown by 2.41%.
The Revenue has been growing slightly by 6.15% on average over the past years.
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
The Earnings Per Share is expected to grow by 9.25% on average over the next years. This is quite good.
EA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.40% yearly.
EPS Next Y24.46%
EPS Next 2Y17.69%
EPS Next 3Y15.43%
EPS Next 5Y9.25%
Revenue Next Year10.29%
Revenue Next 2Y7.6%
Revenue Next 3Y6.85%
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
The Price/Earnings ratio is 26.28, which means the current valuation is very expensive for EA.
Compared to the rest of the industry, the Price/Earnings ratio of EA indicates a rather cheap valuation: EA is cheaper than 81.01% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.02, EA is valued at the same level.
The Price/Forward Earnings ratio is 18.21, which indicates a rather expensive current valuation of EA.
Based on the Price/Forward Earnings ratio, EA is valued cheaper than 84.81% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.66, EA is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.28 | ||
| Fwd PE | 18.21 |
4.2 Price Multiples
EA's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EA is cheaper than 62.03% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, EA is valued cheaper than 82.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.2 | ||
| EV/EBITDA | 23.13 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of EA may justify a higher PE ratio.
A more expensive valuation may be justified as EA's earnings are expected to grow with 15.43% in the coming years.
PEG (NY)1.07
PEG (5Y)3.84
EPS Next 2Y17.69%
EPS Next 3Y15.43%
5. Dividend
5.1 Amount
EA has a yearly dividend return of 0.45%, which is pretty low.
EA's Dividend Yield is rather good when compared to the industry average which is at 10.60. EA pays more dividend than 81.01% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, 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 2Y17.69%
EPS Next 3Y15.43%
NASDAQ:EA (9/8/2025, 12:21:03 PM)
169.24
+0.62 (+0.37%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners105.5%
Inst Owner Change-0.34%
Ins Owners0.19%
Ins Owner Change2.36%
Market Cap42.35B
Analysts76
Price Target176.77 (4.45%)
Short Float %3.63%
Short Ratio3.15
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)1.41%
PT rev (3m)14.33%
EPS NQ rev (1m)-28.43%
EPS NQ rev (3m)-36%
EPS NY rev (1m)0.87%
EPS NY rev (3m)-0.69%
Revenue NQ rev (1m)-3.15%
Revenue NQ rev (3m)-9.65%
Revenue NY rev (1m)0.98%
Revenue NY rev (3m)0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.28 | ||
| Fwd PE | 18.21 | ||
| P/S | 5.67 | ||
| P/FCF | 24.2 | ||
| P/OCF | 21.43 | ||
| P/B | 6.96 | ||
| P/tB | 100.35 | ||
| EV/EBITDA | 23.13 |
EPS(TTM)6.44
EY3.81%
EPS(NY)9.29
Fwd EY5.49%
FCF(TTM)6.99
FCFY4.13%
OCF(TTM)7.9
OCFY4.67%
SpS29.87
BVpS24.31
TBVpS1.69
PEG (NY)1.07
PEG (5Y)3.84
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 | 6.28 |
F-Score7
WACC8.46%
ROIC/WACC1.52
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 Y24.46%
EPS Next 2Y17.69%
EPS Next 3Y15.43%
EPS Next 5Y9.25%
Revenue 1Y (TTM)2.41%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%2.85%
Revenue Next Year10.29%
Revenue Next 2Y7.6%
Revenue Next 3Y6.85%
Revenue Next 5Y4.4%
EBIT growth 1Y0.61%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year35.92%
EBIT Next 3Y16.06%
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%