ELECTRONIC ARTS INC (EA)
US2855121099 - Common Stock
Taking everything into account, EA scores 6 out of 10 in our fundamental rating. EA was compared to 77 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year EA was profitable.
In the past year EA had a positive cash flow from operations.
Each year in the past 5 years EA has been profitable.
In the past 5 years EA always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of EA (7.92%) is better than 92.21% of its industry peers.
The Return On Equity of EA (14.32%) is better than 87.01% of its industry peers.
EA has a Return On Invested Capital of 10.16%. This is amongst the best in the industry. EA outperforms 87.01% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EA is significantly below the industry average of 37.63%.
The last Return On Invested Capital (10.16%) for EA is above the 3 year average (8.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.92% | ||
| ROE | 14.32% | ||
| ROIC | 10.16% |
ROA(3y)5.99%
ROA(5y)11.34%
ROE(3y)10.67%
ROE(5y)18.37%
ROIC(3y)8.04%
ROIC(5y)9.14%
1.3 Margins
The Profit Margin of EA (14.09%) is better than 87.01% of its industry peers.
EA's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 20.54%, EA belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
EA's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 76.48%, EA belongs to the top of the industry, outperforming 94.81% of the companies in the same industry.
In the last couple of years the Gross Margin of EA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.54% | ||
| PM (TTM) | 14.09% | ||
| GM | 76.48% |
OM growth 3Y-8.83%
OM growth 5Y-6.43%
PM growth 3Y-41.84%
PM growth 5Y-11.82%
GM growth 3Y0.33%
GM growth 5Y0.22%
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.
Compared to 1 year ago, EA has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.15 indicates that EA is not in any danger for bankruptcy at the moment.
The Altman-Z score of EA (5.15) is better than 87.01% of its industry peers.
EA has a debt to FCF ratio of 0.87. This is a very positive value and a sign of high solvency as it would only need 0.87 years to pay back of all of its debts.
The Debt to FCF ratio of EA (0.87) is better than 92.21% of its industry peers.
EA has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of EA (0.25) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.87 | ||
| Altman-Z | 5.15 |
ROIC/WACC1.15
WACC8.85%
2.3 Liquidity
EA has a Current Ratio of 1.33. This is a normal value and indicates that EA is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.33, EA is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
EA has a Quick Ratio of 1.33. This is a normal value and indicates that EA is financially healthy and should not expect problems in meeting its short term obligations.
EA has a Quick ratio of 1.33. This is in the better half of the industry: EA outperforms 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.77% over the past year.
The Earnings Per Share has been growing slightly by 7.63% on average over the past years.
EA shows a small growth in Revenue. In the last year, the Revenue has grown by 3.80%.
EA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.59% yearly.
EPS 1Y (TTM)18.77%
EPS 3Y10.48%
EPS 5Y7.63%
EPS growth Q2Q5.71%
Revenue 1Y (TTM)3.8%
Revenue growth 3Y10.28%
Revenue growth 5Y7.59%
Revenue growth Q2Q3.4%
3.2 Future
The Earnings Per Share is expected to grow by 9.58% on average over the next years. This is quite good.
The Revenue is expected to grow by 6.04% on average over the next years.
EPS Next Y12.46%
EPS Next 2Y9.59%
EPS Next 3Y10.13%
EPS Next 5Y9.58%
Revenue Next Year5.86%
Revenue Next 2Y4.41%
Revenue Next 3Y5.08%
Revenue Next 5Y6.04%
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
With a Price/Earnings ratio of 17.12, EA is valued on the expensive side.
Based on the Price/Earnings ratio, EA is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.80, EA is valued a bit cheaper.
With a Price/Forward Earnings ratio of 16.09, EA is valued correctly.
Based on the Price/Forward Earnings ratio, EA is valued cheaper than 88.31% of the companies in the same industry.
EA is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.27, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.12 | ||
| Fwd PE | 16.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EA indicates a somewhat cheap valuation: EA is cheaper than 70.13% of the companies listed in the same industry.
EA's Price/Free Cash Flow ratio is rather cheap when compared to the industry. EA is cheaper than 88.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.57 | ||
| EV/EBITDA | 16.08 |
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.
PEG (NY)1.37
PEG (5Y)2.24
EPS Next 2Y9.59%
EPS Next 3Y10.13%
5. Dividend
5.1 Amount
EA has a yearly dividend return of 0.59%, which is pretty low.
EA's Dividend Yield is rather good when compared to the industry average which is at 27.67. EA pays more dividend than 84.42% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, EA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
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 Years3
Div Non Decr Years3
5.3 Sustainability
EA pays out 19.09% of its income as dividend. This is a sustainable payout ratio.
DP19.09%
EPS Next 2Y9.59%
EPS Next 3Y10.13%
ELECTRONIC ARTS INC
NASDAQ:EA (4/18/2024, 7:00:02 PM)
After market: 125.38 -0.25 (-0.2%)125.63
-0.68 (-0.54%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
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Market Cap33.59B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.12 | ||
| Fwd PE | 16.09 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.37
PEG (5Y)2.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.92% | ||
| ROE | 14.32% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 20.54% | ||
| PM (TTM) | 14.09% | ||
| GM | 76.48% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.77%
EPS 3Y10.48%
EPS 5Y
EPS growth Q2Q
EPS Next Y12.46%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.8%
Revenue growth 3Y10.28%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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