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Market Cap

US$40.7b

Last Updated

2021/04/09 22:26 UTC

Data Sources

Company Financials +

Executive Summary

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. More Details


Snowflake Analysis

Excellent balance sheet with questionable track record.


Similar Companies

Share Price & News

How has Electronic Arts's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EA is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: EA's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

1.8%

EA

1.7%

US Entertainment

1.6%

US Market


1 Year Return

32.8%

EA

86.7%

US Entertainment

55.3%

US Market

Return vs Industry: EA underperformed the US Entertainment industry which returned 86.7% over the past year.

Return vs Market: EA underperformed the US Market which returned 55.3% over the past year.


Shareholder returns

EAIndustryMarket
7 Day1.8%1.7%1.6%
30 Day7.9%0.03%4.1%
90 Day-1.0%2.5%5.5%
1 Year33.1%32.8%86.9%86.7%58.1%55.3%
3 Year16.8%16.5%109.1%106.1%63.8%53.3%
5 Year110.7%110.1%172.5%161.4%120.2%95.7%

Long-Term Price Volatility Vs. Market

How volatile is Electronic Arts's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Electronic Arts undervalued compared to its fair value and its price relative to the market?

34.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EA ($141.55) is trading above our estimate of fair value ($114.59)

Significantly Below Fair Value: EA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: EA is good value based on its PE Ratio (34.7x) compared to the US Entertainment industry average (38.1x).

PE vs Market: EA is poor value based on its PE Ratio (34.7x) compared to the US market (22.3x).


Price to Earnings Growth Ratio

PEG Ratio: EA is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: EA is overvalued based on its PB Ratio (5.1x) compared to the US Entertainment industry average (5x).


Future Growth

How is Electronic Arts forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?

18.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EA's forecast earnings growth (18.8% per year) is above the savings rate (2%).

Earnings vs Market: EA's earnings (18.8% per year) are forecast to grow faster than the US market (18.7% per year).

High Growth Earnings: EA's earnings are forecast to grow, but not significantly.

Revenue vs Market: EA's revenue (7% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: EA's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EA's Return on Equity is forecast to be low in 3 years time (16.8%).


Past Performance

How has Electronic Arts performed over the past 5 years?

17.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EA has high quality earnings.

Growing Profit Margin: EA's current net profit margins (20.8%) are lower than last year (52.6%).


Past Earnings Growth Analysis

Earnings Trend: EA's earnings have grown by 17.3% per year over the past 5 years.

Accelerating Growth: EA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: EA had negative earnings growth (-58.4%) over the past year, making it difficult to compare to the Entertainment industry average (52.6%).


Return on Equity

High ROE: EA's Return on Equity (14.8%) is considered low.


Financial Health

How is Electronic Arts's financial position?


Financial Position Analysis

Short Term Liabilities: EA's short term assets ($7.7B) exceed its short term liabilities ($3.5B).

Long Term Liabilities: EA's short term assets ($7.7B) exceed its long term liabilities ($965.0M).


Debt to Equity History and Analysis

Debt Level: EA's debt to equity ratio (12.5%) is considered satisfactory.

Reducing Debt: EA's debt to equity ratio has increased from 11.6% to 12.5% over the past 5 years.

Debt Coverage: EA's debt is well covered by operating cash flow (206.7%).

Interest Coverage: EA earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Electronic Arts's current dividend yield, its reliability and sustainability?

0.48%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: EA's dividend (0.48%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.27%).

High Dividend: EA's dividend (0.48%) is low compared to the top 25% of dividend payers in the US market (3.5%).


Stability and Growth of Payments

Stable Dividend: EA is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: EA is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: EA is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.8yrs

Average management tenure


CEO

Andrew Wilson (45 yo)

7.58yrs

Tenure

US$21,365,751

Compensation

Mr. Andrew Wilson has been a Trustee of The Paley Center for Media since April 2020. He has been the Chief Executive Officer of Electronic Arts Inc. since September 17, 2013, where he provides direct insig...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD21.37M) is above average for companies of similar size in the US market ($USD10.94M).

Compensation vs Earnings: Andrew's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: EA's management team is seasoned and experienced (6.8 years average tenure).


Board Members

Experienced Board: EA's board of directors are considered experienced (9.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: EA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Electronic Arts Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Electronic Arts Inc.
  • Ticker: EA
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: US$40.713b
  • Shares outstanding: 287.63m
  • Website: https://www.ea.com

Number of Employees


Location

  • Electronic Arts Inc.
  • 209 Redwood Shores Parkway
  • Redwood City
  • California
  • 94065
  • United States

Listings


Biography

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. The company develops and publishes games and se...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/09 22:26
End of Day Share Price2021/04/09 00:00
Earnings2020/12/31
Annual Earnings2020/03/31


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.