ELECTRONIC ARTS INC (EA) Stock Fundamental Analysis
NASDAQ:EA - Nasdaq - US2855121099 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to EA. EA was compared to 71 industry peers in the Entertainment industry. EA gets an excellent profitability rating and is at the same time showing great financial health properties. EA has a valuation in line with the averages, but it does not seem to be growing.
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.
Each year in the past 5 years EA has been profitable.
Each year in the past 5 years EA had a positive operating cash flow.
1.2 Ratios
EA has a better Return On Assets (9.06%) than 91.55% of its industry peers.
Looking at the Return On Equity, with a value of 17.55%, EA belongs to the top of the industry, outperforming 87.32% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.27%, EA belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for EA is significantly below the industry average of 23.28%.
The last Return On Invested Capital (13.27%) for EA is above the 3 year average (12.06%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 15.02%, EA belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
In the last couple of years the Profit Margin of EA has declined.
The Operating Margin of EA (21.13%) is better than 90.14% of its industry peers.
EA's Operating Margin has declined in the last couple of years.
EA has a Gross Margin of 79.32%. This is amongst the best in the industry. EA outperforms 91.55% of its industry peers.
EA's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EA is creating some value.
Compared to 1 year ago, EA has less shares outstanding
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 5.67 indicates that EA is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.67, EA belongs to the top of the industry, outperforming 88.73% of the companies in the same industry.
The Debt to FCF ratio of EA is 1.01, which is an excellent value as it means it would take EA, only 1.01 years of fcf income to pay off all of its debts.
EA has a better Debt to FCF ratio (1.01) than 81.69% of its industry peers.
EA has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of EA (0.23) is better than 60.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | 5.67 |
ROIC/WACC1.51
WACC8.8%
2.3 Liquidity
A Current Ratio of 0.95 indicates that EA may have some problems paying its short term obligations.
The Current ratio of EA (0.95) is comparable to the rest of the industry.
EA has a Quick Ratio of 0.95. This is a bad value and indicates that EA is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of EA (0.95) is comparable to the rest of the industry.
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 | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The earnings per share for EA 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.
Looking at the last year, EA shows a decrease in Revenue. The Revenue has decreased by -1.31% in the last 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)-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
EA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.25% yearly.
EA 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
EA is valuated rather expensively with a Price/Earnings ratio of 22.01.
Based on the Price/Earnings ratio, EA is valued cheaper than 83.10% of the companies in the same industry.
When comparing the Price/Earnings ratio of EA to the average of the S&P500 Index (26.03), we can say EA is valued inline with the index average.
EA is valuated rather expensively with a Price/Forward Earnings ratio of 17.57.
Based on the Price/Forward Earnings ratio, EA is valued cheaply inside the industry as 84.51% 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 21.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.01 | ||
| Fwd PE | 17.57 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EA is valued a bit cheaper than the industry average as 60.56% of the companies are valued more expensively.
73.24% of the companies in the same industry are more expensive than EA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.72 | ||
| EV/EBITDA | 20.05 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
EA has an outstanding profitability rating, which may justify a higher PE ratio.
EA's earnings are expected to grow with 15.08% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.87
PEG (5Y)3.22
EPS Next 2Y17.52%
EPS Next 3Y15.08%
5. Dividend
5.1 Amount
With a yearly dividend of 0.51%, EA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.62, EA pays a better dividend. On top of this EA pays more dividend than 83.10% of the companies listed in the same industry.
With a Dividend Yield of 0.51, EA pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
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 Years4
5.3 Sustainability
EA pays out 17.75% of its income as dividend. This is a sustainable payout ratio.
DP17.75%
EPS Next 2Y17.52%
EPS Next 3Y15.08%
NASDAQ:EA (5/22/2025, 12:55:06 PM)
147.72
-2.78 (-1.85%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners102.38%
Inst Owner Change-1.91%
Ins Owners0.18%
Ins Owner Change-1.24%
Market Cap38.50B
Analysts74.74
Price Target154.61 (4.66%)
Short Float %2.82%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
Yearly Dividend0.77
Dividend Growth(5Y)N/A
DP17.75%
Div Incr Years3
Div Non Decr Years4
Ex-Date
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)1
Avg Revenue beat(8)-2.19%
Revenue beat(12)4
Avg Revenue beat(12)0.15%
Revenue beat(16)6
Avg Revenue beat(16)-0.9%
PT rev (1m)2.65%
PT rev (3m)-0.52%
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 | 22.01 | ||
| Fwd PE | 17.57 | ||
| P/S | 5.16 | ||
| P/FCF | 20.72 | ||
| P/OCF | 18.52 | ||
| P/B | 6.03 | ||
| P/tB | 53.69 | ||
| EV/EBITDA | 20.05 |
EPS(TTM)6.71
EY4.54%
EPS(NY)8.41
Fwd EY5.69%
FCF(TTM)7.13
FCFY4.83%
OCF(TTM)7.98
OCFY5.4%
SpS28.64
BVpS24.5
TBVpS2.75
PEG (NY)0.87
PEG (5Y)3.22
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 | 5.67 |
F-Score7
WACC8.8%
ROIC/WACC1.51
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 Year25.53%
EBIT Next 3Y14.82%
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%