ELECTRONIC ARTS INC (EA) Stock Fundamental Analysis
USA - NASDAQ:EA - US2855121099 - Common Stock
200.6 USD
+0.22 (+0.11%)
200.6 USD
0 (0%)
Taking everything into account, EA scores 6 out of 10 in our fundamental rating. EA was compared to 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.
In the past year EA had a positive cash flow from operations.
EA had positive earnings in each of the past 5 years.
EA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.91%, EA belongs to the best of the industry, outperforming 84.81% 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 83.54% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.83%, EA belongs to the best of the industry, outperforming 89.87% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for EA is above the industry average of 9.20%.
The 3 year average ROIC (12.06%) for EA is below the current ROIC(12.83%), indicating increased profibility in the last year.
| 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 88.61% 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 19.83%, EA belongs to the top of the industry, outperforming 91.14% 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 79.14%, EA belongs to the top of the industry, outperforming 91.14% 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 | 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
EA 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 EA has been reduced compared to 1 year ago.
The number of shares outstanding for EA has been reduced compared to 5 years ago.
EA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.10 indicates that EA is not in any danger for bankruptcy at the moment.
EA has a better Altman-Z score (7.10) than 86.08% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 1.08, EA belongs to the top of the industry, outperforming 81.01% of the companies in the same industry.
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 comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 7.1 |
ROIC/WACC1.51
WACC8.51%
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: 62.03% of the companies in the same industry are doing better.
EA has a Quick 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.
Looking at the Quick ratio, with a value of 0.84, EA is doing worse than 60.76% of the companies in the same 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 | 0.84 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The earnings per share for EA have decreased strongly by -21.43% in the last year.
EA shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.84% yearly.
EA shows a decrease in Revenue. In the last year, the revenue decreased by -1.31%.
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)-21.43%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-43.72%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%-12.55%
3.2 Future
The Earnings Per Share is expected to grow by 9.25% on average over the next years. This is quite good.
Based on estimates for the next years, EA will show a small growth in Revenue. The Revenue will grow by 5.29% on average per year.
EPS Next Y27.84%
EPS Next 2Y17.94%
EPS Next 3Y15.69%
EPS Next 5Y9.25%
Revenue Next Year11.64%
Revenue Next 2Y7.51%
Revenue Next 3Y6.57%
Revenue Next 5Y5.29%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
EA is valuated quite expensively with a Price/Earnings ratio of 36.47.
Based on the Price/Earnings ratio, EA is valued a bit cheaper than 74.68% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.06, EA is valued a bit more expensive.
A Price/Forward Earnings ratio of 21.49 indicates a rather expensive valuation of EA.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EA indicates a somewhat cheap valuation: EA is cheaper than 79.75% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of EA to the average of the S&P500 Index (32.73), we can say EA is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.47 | ||
| Fwd PE | 21.49 |
4.2 Price Multiples
EA's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, EA is valued a bit cheaper than 77.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.58 | ||
| EV/EBITDA | 27.31 |
4.3 Compensation for Growth
The 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 15.69% in the coming years.
PEG (NY)1.31
PEG (5Y)5.33
EPS Next 2Y17.94%
EPS Next 3Y15.69%
5. Dividend
5.1 Amount
With a yearly dividend of 0.38%, 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 38.31. EA pays more dividend than 81.01% of the companies in the same industry.
With a Dividend Yield of 0.38, EA pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
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 2Y17.94%
EPS Next 3Y15.69%
200.6
+0.22 (+0.11%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners103.56%
Inst Owner Change-1.32%
Ins Owners0.19%
Ins Owner Change1.9%
Market Cap50.02B
Revenue(TTM)7.46B
Net Income(TTM)1.04B
Analysts67.65
Price Target196.56 (-2.01%)
Short Float %1.95%
Short Ratio1.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
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)10.9%
PT rev (3m)12.77%
EPS NQ rev (1m)-0.57%
EPS NQ rev (3m)-33.02%
EPS NY rev (1m)0.69%
EPS NY rev (3m)3.61%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)-3.1%
Revenue NY rev (1m)0.81%
Revenue NY rev (3m)2.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.47 | ||
| Fwd PE | 21.49 | ||
| P/S | 6.69 | ||
| P/FCF | 28.58 | ||
| P/OCF | 25.31 | ||
| P/B | 8.22 | ||
| P/tB | 118.52 | ||
| EV/EBITDA | 27.31 |
EPS(TTM)5.5
EY2.74%
EPS(NY)9.33
Fwd EY4.65%
FCF(TTM)7.02
FCFY3.5%
OCF(TTM)7.92
OCFY3.95%
SpS29.98
BVpS24.39
TBVpS1.69
PEG (NY)1.31
PEG (5Y)5.33
Graham Number54.94
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%
ROICexgc growth 3Y5.86%
ROICexgc 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 | 7.1 |
F-Score7
WACC8.51%
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)-21.43%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-43.72%
EPS Next Y27.84%
EPS Next 2Y17.94%
EPS Next 3Y15.69%
EPS Next 5Y9.25%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%-12.55%
Revenue Next Year11.64%
Revenue Next 2Y7.51%
Revenue Next 3Y6.57%
Revenue Next 5Y5.29%
EBIT growth 1Y0.61%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.3%
EBIT Next 3Y16.17%
EBIT Next 5Y10.74%
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%
ELECTRONIC ARTS INC / EA FAQ
What is the fundamental rating for EA stock?
ChartMill assigns a fundamental rating of 6 / 10 to EA.
What is the valuation status for EA stock?
ChartMill assigns a valuation rating of 5 / 10 to ELECTRONIC ARTS INC (EA). This can be considered as Fairly Valued.
What is the profitability of EA stock?
ELECTRONIC ARTS INC (EA) has a profitability rating of 8 / 10.
What is the expected EPS growth for ELECTRONIC ARTS INC (EA) stock?
The Earnings per Share (EPS) of ELECTRONIC ARTS INC (EA) is expected to grow by 27.84% in the next year.
How sustainable is the dividend of ELECTRONIC ARTS INC (EA) stock?
The dividend rating of ELECTRONIC ARTS INC (EA) is 4 / 10 and the dividend payout ratio is 18.91%.