Electronic Arts Valuation

Is ERT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ERT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ERT (€140.34) is trading below our estimate of fair value (€247.78)

Significantly Below Fair Value: ERT is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for ERT?

Key metric: As ERT is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ERT. This is calculated by dividing ERT's market cap by their current earnings.
What is ERT's PE Ratio?
PE Ratio37.1x
EarningsUS$1.05b
Market CapUS$38.79b

Price to Earnings Ratio vs Peers

How does ERT's PE Ratio compare to its peers?

The above table shows the PE ratio for ERT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average28.6x
EVD CTS Eventim KGaA
31.3x13.9%€7.9b
G24 Scout24
34.9x15.0%€6.1b
9999 NetEase
15.7x8.8%HK$460.5b
7974 Nintendo
32.4x12.1%JP¥10.6t
ERT Electronic Arts
37.1x13.0%€38.8b

Price-To-Earnings vs Peers: ERT is expensive based on its Price-To-Earnings Ratio (37.1x) compared to the peer average (28.6x).


Price to Earnings Ratio vs Industry

How does ERT's PE Ratio compare vs other companies in the European Entertainment Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
ERT 37.1xIndustry Avg. 12.8xNo. of Companies12PE01224364860+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ERT is expensive based on its Price-To-Earnings Ratio (37.1x) compared to the European Entertainment industry average (12.3x).


Price to Earnings Ratio vs Fair Ratio

What is ERT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ERT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio37.1x
Fair PE Ratio23.5x

Price-To-Earnings vs Fair Ratio: ERT is expensive based on its Price-To-Earnings Ratio (37.1x) compared to the estimated Fair Price-To-Earnings Ratio (23.5x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ERT forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€140.34
€153.88
+9.6%
7.0%€174.49€136.35n/a24
Dec ’25€154.00
€148.93
-3.3%
7.0%€168.87€131.96n/a24
Nov ’25€138.34
€148.93
+7.7%
7.0%€168.87€131.96n/a24
Oct ’25€128.92
€144.76
+12.3%
6.8%€165.78€126.83n/a24
Sep ’25€135.88
€144.18
+6.1%
6.5%€165.23€126.41n/a25
Aug ’25€139.88
€147.46
+5.4%
6.8%€169.00€129.29n/a24
Jul ’25€129.62
€140.21
+8.2%
5.8%€158.98€126.25n/a25
Jun ’25€120.66
€140.11
+16.1%
5.5%€158.22€125.64n/a26
May ’25€119.20
€142.15
+19.3%
5.0%€159.00€126.27n/a27
Apr ’25€121.14
€140.38
+15.9%
4.6%€152.41€129.32n/a26
Mar ’25€129.18
€140.39
+8.7%
4.5%€152.26€129.19n/a26
Feb ’25€127.40
€139.66
+9.6%
4.6%€151.80€128.80n/a26
Jan ’25€123.18
€134.49
+9.2%
5.8%€146.74€117.75n/a25
Dec ’24€127.30
€134.89
+6.0%
5.7%€147.65€118.48€154.0025
Nov ’24€116.92
€136.51
+16.8%
6.2%€151.39€120.17€138.3426
Oct ’24€112.62
€134.32
+19.3%
6.4%€149.74€118.86€128.9227
Sep ’24€110.44
€133.77
+21.1%
6.8%€149.96€117.56€135.8826
Aug ’24€123.66
€131.58
+6.4%
6.4%€146.80€117.62€139.8826
Jul ’24€119.98
€129.84
+8.2%
4.8%€141.70€118.69€129.6226
Jun ’24€119.46
€130.08
+8.9%
5.1%€139.50€116.25€120.6627
May ’24€115.34
€122.03
+5.8%
7.0%€136.73€102.09€119.2028
Apr ’24€109.08
€123.69
+13.4%
7.8%€140.20€103.31€121.1427
Mar ’24€104.44
€125.53
+20.2%
7.8%€142.74€105.18€129.1826
Feb ’24€103.24
€124.56
+20.7%
8.6%€142.92€101.95€127.4028
Jan ’24€113.78
€141.00
+23.9%
7.7%€177.36€118.87€123.1829
Dec ’23€124.64
€144.78
+16.2%
7.8%€181.95€121.94€127.3029

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/20 15:50
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2024/03/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Electronic Arts Inc. is covered by 69 analysts. 16 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
David MakArete Research Services LLP
Joseph BonnerArgus Research Company
Edward WooAscendiant Capital Markets LLC