NasdaqGS:EA

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet with solid 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


Market Performance


7 Day Return

1.0%

EA

-0.02%

US Entertainment

0.4%

US Market


1 Year Return

-6.8%

EA

1.3%

US Entertainment

6.9%

US Market

Return vs Industry: EA underperformed the US Entertainment industry which returned 1.3% over the past year.

Return vs Market: EA underperformed the US Market which returned 6.9% over the past year.


Shareholder returns

EAIndustryMarket
7 Day1.0%-0.02%0.4%
30 Day-4.6%-2.6%-1.1%
90 Day8.7%-4.4%-0.5%
1 Year-6.8%-6.8%2.1%1.3%9.3%6.9%
3 Year14.8%14.8%52.6%47.7%45.8%36.4%
5 Year161.7%161.7%90.3%78.3%62.9%45.1%

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?

13.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: EA ($95.13) is trading above our estimate of fair value ($90.73)

Significantly Undervalued: 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 (13.3x) compared to the Entertainment industry average (40.9x).

PE vs Market: EA is good value based on its PE Ratio (13.3x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: EA's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: EA is overvalued based on its PB Ratio (4.3x) compared to the US Entertainment industry average (2.9x).


Next Steps

Future Growth

How is Electronic Arts forecast to perform in the next 1 to 3 years based on estimates from 30 analysts?

-45.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EA's earnings are forecast to decline over the next 3 years (-45.4% per year).

Earnings vs Market: EA's earnings are forecast to decline over the next 3 years (-45.4% per year).

High Growth Earnings: EA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: EA's revenue (5.5% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: EA's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: EA's Return on Equity is forecast to be low in 3 years time (19.7%).


Next Steps

Past Performance

How has Electronic Arts performed over the past 5 years?

16.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: EA's earnings have grown by 16.3% per year over the past 5 years.

Accelerating Growth: EA's earnings growth over the past year (210.3%) exceeds its 5-year average (16.3% per year).

Earnings vs Industry: EA earnings growth over the past year (210.3%) exceeded the Entertainment industry 21.5%.


Return on Equity

High ROE: EA's Return on Equity (33.1%) is considered high.


Return on Assets

ROA vs Industry: EA has a higher Return on Assets than the Entertainment industry average last year.


Return on Capital Employed

ROCE Improving: EA's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Electronic Arts's financial position?


Financial Position Analysis

Short Term Liabilities: EA's short term assets ($5.8B) exceeds its short term liabilities ($1.7B)

Long Term Liabilities: EA's short term assets (5.8B) exceeds its long term liabilities (1.6B)


Debt to Equity History and Analysis

Debt Level: EA's debt to equity ratio (15.3%) is considered satisfactory

Reducing Debt: EA's debt to equity ratio has reduced from 21.6% to 15.3% over the past 5 years.

Debt Coverage: EA's debt is well covered by operating cash flow (159.3%).

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


Balance Sheet

Inventory Level: EA has a low level of unsold assets or inventory.

Debt Coverage by Assets: EA's debt is covered by short term assets (assets are 5.829140x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate EA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate EA's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if EA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


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

What is the CEO of Electronic Arts's salary, the management and board of directors tenure and is there insider trading?

5.3yrs

Average management tenure


CEO

Andrew Wilson (44yo)

6.1yrs

Tenure

US$18,320,071

Compensation

Mr. Andrew Wilson has been the Chief Executive Officer of Electronic Arts Inc. since September 17, 2013, where he provides direct insight into the day-to-day operation and strategic vision. Mr. Wilson serv ...


CEO Compensation Analysis

Compensation vs. Market: Andrew's total compensation ($USD18.32M) is about average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

5.3yrs

Average Tenure

49.5yo

Average Age

Experienced Management: EA's management team is seasoned and experienced (5.3 years average tenure).


Board Age and Tenure

8.1yrs

Average Tenure

56yo

Average Age

Experienced Board: EA's board of directors are considered experienced (8.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$302,40006 Aug 19
Luis Ubiñas
EntityIndividual
Role
Lead Director
Lead Director
Shares3,389
Max PriceUS$89.23
SellUS$171,34131 May 19
Joel Linzner
EntityIndividual
Shares1,859
Max PriceUS$92.17
SellUS$187,51710 May 19
Mala Singh
EntityIndividual
Role
Head of Human Resources
Chief People Officer
Shares2,000
Max PriceUS$93.76
SellUS$102,38021 Feb 19
Jacob Schatz
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares1,000
Max PriceUS$102.38
SellUS$1,005,49313 Feb 19
Leonard Coleman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$100.55
SellUS$17,16204 Dec 18
Mala Singh
EntityIndividual
Role
Head of Human Resources
Chief People Officer
Shares200
Max PriceUS$85.81
SellUS$18,20005 Nov 18
Mala Singh
EntityIndividual
Role
Head of Human Resources
Chief People Officer
Shares200
Max PriceUS$91.00

Ownership Breakdown


Management Team

  • Blake Jorgensen (59yo)

    COO & CFO

    • Tenure: 7.1yrs
    • Compensation: US$9.41m
  • Ken Barker (52yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 16.3yrs
    • Compensation: US$1.19m
  • Chris Evenden

    Vice President of Investor Relations

    • Tenure: 5.1yrs
  • Chris Bruzzo (49yo)

    Chief Marketing Officer

    • Tenure: 5.1yrs
    • Compensation: US$6.38m
  • David Tinson

    Senior Vice President of Global Communications

    • Tenure: 0yrs
  • Ken Moss (53yo)

    Chief Technology Officer

    • Tenure: 5.3yrs
    • Compensation: US$6.95m
  • Andrew Wilson (44yo)

    CEO & Director

    • Tenure: 6.1yrs
    • Compensation: US$18.32m
  • Jacob Schatz (50yo)

    Executive VP

    • Tenure: 5.3yrs
  • Laura Miele (49yo)

    Chief Studios Officer

    • Tenure: 5.3yrs
    • Compensation: US$6.95m
  • Mala Singh (48yo)

    Chief People Officer

    • Tenure: 3yrs

Board Members

  • Jay Hoag (61yo)

    Independent Director

    • Tenure: 8.1yrs
    • Compensation: US$353.37k
  • Lawrence Probst (69yo)

    Non-Executive Chairman

    • Tenure: 25.3yrs
    • Compensation: US$369.87k
  • Leonard Coleman (70yo)

    Independent Director

    • Tenure: 18.3yrs
    • Compensation: US$342.37k
  • Rick Simonson (60yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$358.91k
  • Luis Ubiñas (56yo)

    Lead Director

    • Tenure: 4.2yrs
    • Compensation: US$375.40k
  • Jeff Huber (51yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$342.35k
  • Heidi Ueberroth (53yo)

    Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$334.62k
  • Andrew Wilson (44yo)

    CEO & Director

    • Tenure: 6.1yrs
    • Compensation: US$18.32m
  • Talbott Roche (52yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$341.78k

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$28.036b
  • Shares outstanding: 294.71m
  • Website: https://www.ea.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDSep 1989
ERTDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1989
EAWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1989
EA *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1989
EAIN34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.5 COM USD0.01BRBRLMay 2019

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 Analysis2019/10/19 23:36
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2019/03/31


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.