ELECTRONIC ARTS INC (EA) Stock Fundamental Analysis
NASDAQ:EA - Nasdaq - US2855121099 - Common Stock - Currency: USD
EA gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 72 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 is valued correctly, but it does not seem to be growing.
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.
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
With an excellent Return On Assets value of 9.06%, EA belongs to the best of the industry, outperforming 90.28% of the companies in the same industry.
EA's Return On Equity of 17.55% is amongst the best of the industry. EA outperforms 86.11% of its industry peers.
EA has a Return On Invested Capital of 13.27%. This is amongst the best in the industry. EA outperforms 91.67% of its industry peers.
EA had an Average Return On Invested Capital over the past 3 years of 12.06%. This is significantly below the industry average of 22.90%.
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
EA has a Profit Margin of 15.02%. This is amongst the best in the industry. EA outperforms 90.28% of its industry peers.
In the last couple of years the Profit Margin of EA has declined.
Looking at the Operating Margin, with a value of 21.13%, EA belongs to the top of the industry, outperforming 90.28% of the companies in the same industry.
EA's Operating Margin has declined in the last couple of years.
EA has a better Gross Margin (79.32%) than 91.67% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EA is still creating some value.
Compared to 1 year ago, EA has less shares outstanding
EA has less shares outstanding than it did 5 years ago.
EA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.74 indicates that EA is not in any danger for bankruptcy at the moment.
EA has a Altman-Z score of 5.74. This is amongst the best in the industry. EA outperforms 84.72% of its industry peers.
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.
With an excellent Debt to FCF ratio value of 1.01, EA belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
EA has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
EA has a Debt to Equity ratio (0.23) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | 5.74 |
ROIC/WACC1.54
WACC8.63%
2.3 Liquidity
EA has a Current 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.
EA's Current ratio of 0.95 is in line compared to the rest of the industry. EA outperforms 50.00% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.95, EA is in line with its industry, outperforming 52.78% 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 | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The earnings per share for EA have decreased by -3.17% in the last year.
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%.
EA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.15% yearly.
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
The Earnings Per Share is expected to grow by 9.25% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.10% on average over the next years.
EPS Next Y25.31%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
EPS Next 5Y9.25%
Revenue Next Year9.67%
Revenue Next 2Y7.61%
Revenue Next 3Y6.52%
Revenue Next 5Y4.1%
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 23.52, which indicates a rather expensive current valuation of EA.
Based on the Price/Earnings ratio, EA is valued cheaper than 81.94% of the companies in the same industry.
EA is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
EA is valuated rather expensively with a Price/Forward Earnings ratio of 18.77.
83.33% of the companies in the same industry are more expensive than EA, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.70. EA is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.52 | ||
| Fwd PE | 18.77 |
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 63.89% of the companies listed in the same industry.
EA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EA is cheaper than 76.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.3 | ||
| EV/EBITDA | 20.39 |
4.3 Compensation for Growth
EA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 14.98% in the coming years.
PEG (NY)0.93
PEG (5Y)3.44
EPS Next 2Y17.6%
EPS Next 3Y14.98%
5. Dividend
5.1 Amount
EA has a yearly dividend return of 0.48%, which is pretty low.
EA's Dividend Yield is rather good when compared to the industry average which is at 6.63. EA pays more dividend than 80.56% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, EA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
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
EA pays out 17.75% of its income as dividend. This is a sustainable payout ratio.
DP17.75%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
NASDAQ:EA (7/2/2025, 9:35:01 AM)
157.845
-1.22 (-0.76%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners102.66%
Inst Owner Change-1.97%
Ins Owners0.2%
Ins Owner Change1.53%
Market Cap39.58B
Analysts75.26
Price Target171.48 (8.64%)
Short Float %4.19%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.48% |
Yearly Dividend0.77
Dividend Growth(5Y)N/A
DP17.75%
Div Incr Years0
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)10.91%
PT rev (3m)16.5%
EPS NQ rev (1m)-2.23%
EPS NQ rev (3m)-82.13%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)9.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.91%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)3.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.52 | ||
| Fwd PE | 18.77 | ||
| P/S | 5.3 | ||
| P/FCF | 21.3 | ||
| P/OCF | 19.04 | ||
| P/B | 6.2 | ||
| P/tB | 55.21 | ||
| EV/EBITDA | 20.39 |
EPS(TTM)6.71
EY4.25%
EPS(NY)8.41
Fwd EY5.33%
FCF(TTM)7.41
FCFY4.69%
OCF(TTM)8.29
OCFY5.25%
SpS29.76
BVpS25.47
TBVpS2.86
PEG (NY)0.93
PEG (5Y)3.44
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 | 5.74 |
F-Score7
WACC8.63%
ROIC/WACC1.54
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 Y25.31%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
EPS Next 5Y9.25%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%7.98%
Revenue Next Year9.67%
Revenue Next 2Y7.61%
Revenue Next 3Y6.52%
Revenue Next 5Y4.1%
EBIT growth 1Y-4.42%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.25%
EBIT Next 3Y14.8%
EBIT Next 5Y11.53%
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%