ELECTRONIC ARTS INC (EA)
US2855121099 - Common Stock
We assign a fundamental rating of 6 out of 10 to EA. EA was compared to 77 industry peers in the Entertainment industry. EA has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. EA is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year EA was profitable.
EA had a positive operating cash flow in the past year.
In the past 5 years EA has always been profitable.
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 7.92%, EA belongs to the best of the industry, outperforming 92.21% of the companies in the same industry.
Looking at the Return On Equity, with a value of 14.32%, EA belongs to the top of the industry, outperforming 87.01% of the companies in the same industry.
With an excellent Return On Invested Capital value of 10.16%, EA belongs to the best of the industry, outperforming 87.01% of the companies in the same industry.
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.
In the last couple of years the Profit Margin of EA has declined.
The Operating Margin of EA (20.54%) is better than 90.91% of its industry peers.
EA's Operating Margin has declined in the last couple of years.
EA has a better Gross Margin (76.48%) than 94.81% of its industry peers.
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.
Compared to 1 year ago, EA has less shares outstanding
EA has less shares outstanding than it did 5 years ago.
The debt/assets ratio for EA is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.16 indicates that EA is not in any danger for bankruptcy at the moment.
EA has a better Altman-Z score (5.16) 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 | 5.16 |
ROIC/WACC1.14
WACC8.89%
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.
The Current ratio of EA (1.33) is better than 63.64% of its industry peers.
A Quick Ratio of 1.33 indicates that EA should not have too much problems paying its short term obligations.
The Quick ratio of EA (1.33) is better than 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%.
The Revenue has been growing slightly by 7.59% on average over the past years.
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.
Based on estimates for the next years, EA will show a small growth in Revenue. The Revenue will grow by 6.04% on average per year.
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
Based on the Price/Earnings ratio of 17.30, the valuation of EA can be described as rather expensive.
81.82% of the companies in the same industry are more expensive than EA, based on the Price/Earnings ratio.
EA is valuated rather cheaply when we compare the Price/Earnings ratio to 24.93, which is the current average of the S&P500 Index.
EA is valuated correctly with a Price/Forward Earnings ratio of 16.27.
EA's Price/Forward Earnings ratio is rather cheap when compared to the industry. EA is cheaper than 88.31% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.41. EA is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.3 | ||
| Fwd PE | 16.27 |
4.2 Price Multiples
70.13% of the companies in the same industry are more expensive than EA, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, EA is valued cheaper than 88.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.74 | ||
| EV/EBITDA | 16.12 |
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)1.39
PEG (5Y)2.27
EPS Next 2Y9.59%
EPS Next 3Y10.13%
5. Dividend
5.1 Amount
With a yearly dividend of 0.59%, EA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 27.67, EA pays a better dividend. On top of this EA pays more dividend than 84.42% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, 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
19.09% of the earnings are spent on dividend by EA. This is a low number and sustainable payout ratio.
DP19.09%
EPS Next 2Y9.59%
EPS Next 3Y10.13%
ELECTRONIC ARTS INC
NASDAQ:EA (4/17/2024, 1:44:09 PM)
127
+0.45 (+0.36%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap33.95B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.59% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.3 | ||
| Fwd PE | 16.27 | ||
| 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)1.39
PEG (5Y)2.27
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
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y