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 Analysis

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

Stable Share Price: EA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-6.2%

EA

-8.3%

US Entertainment

-11.2%

US Market


1 Year Return

4.1%

EA

8.1%

US Entertainment

4.1%

US Market

Return vs Industry: EA underperformed the US Entertainment industry which returned 8.1% over the past year.

Return vs Market: EA matched the US Market which returned 4.1% over the past year.


Shareholder returns

EAIndustryMarket
7 Day-6.2%-8.3%-11.2%
30 Day-9.7%-5.5%-9.5%
90 Day0.3%-4.7%-5.4%
1 Year4.1%4.1%8.9%8.1%6.2%4.1%
3 Year16.2%16.2%40.7%36.2%30.3%21.9%
5 Year79.8%79.8%77.9%67.0%55.0%38.0%

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?

10.58x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EA ($101.36) is trading above our estimate of fair value ($82.99)

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 (10.6x) compared to the Entertainment industry average (21.2x).

PE vs Market: EA is good value based on its PE Ratio (10.6x) compared to the US market (16.7x).


Price to Earnings Growth Ratio

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 (4.1x) compared to the US Entertainment industry average (2.1x).


Next Steps

Future Growth

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

-44.9%

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 (-44.9% per year).

Earnings vs Market: EA's earnings are forecast to decline over the next 3 years (-44.9% per year).

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

Revenue vs Market: EA's revenue (6.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: EA's revenue (6.4% 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 (19.1%).


Next Steps

Past Performance

How has Electronic Arts performed over the past 5 years?

20.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EA has a high level of non-cash earnings.

Growing Profit Margin: EA's current net profit margins (52.5%) are higher than last year (26.8%).


Past Earnings Growth Analysis

Earnings Trend: EA's earnings have grown by 20% per year over the past 5 years.

Accelerating Growth: EA's earnings growth over the past year (99.7%) exceeds its 5-year average (20% per year).

Earnings vs Industry: EA earnings growth over the past year (99.7%) exceeded the Entertainment industry -8.9%.


Return on Equity

High ROE: EA's Return on Equity (39.1%) is considered high.


Next Steps

Financial Health

How is Electronic Arts's financial position?


Financial Position Analysis

Short Term Liabilities: EA's short term assets ($6.6B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: EA's short term assets ($6.6B) exceed its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: EA's debt to equity ratio (13.7%) is considered satisfactory.

Reducing Debt: EA's debt to equity ratio has reduced from 23.5% to 13.7% over the past 5 years.

Debt Coverage: EA's debt is well covered by operating cash flow (190.8%).

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 6.7x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

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.


Stability and Growth of Payments

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

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

5.7yrs

Average management tenure


CEO

Andrew Wilson (44yo)

6.4yrs

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 ($USD18.32M) is above average for companies of similar size in the US market ($USD10.84M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Wilson
CEO & Director6.4yrsUS$18.32m0.036% $10.8m
Blake Jorgensen
COO & CFO7.4yrsUS$9.41m0.026% $7.7m
Kenneth Moss
Chief Technology Officer5.6yrsUS$6.95m0.051% $15.2m
Christopher Bruzzo
Chief Marketing Officer5.4yrsUS$6.38m0.0089% $2.6m
Laura Miele
Chief Studios Officer5.7yrsUS$6.95m0.0034% $1.0m
Kenneth Barker
Senior VP & Chief Accounting Officer16.7yrsUS$1.19m0.0064% $1.9m
Chris Evenden
Vice President of Investor Relations5.4yrsno datano data
Jacob Schatz
Executive VP5.7yrsno data0.0058% $1.7m
David Tinson
Senior Vice President of Global Communications0yrsno datano data
Mala Singh
Chief People Officer3.3yrsno data0.0058% $1.7m

5.7yrs

Average Tenure

49.5yo

Average Age

Experienced Management: EA's management team is seasoned and experienced (5.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Wilson
CEO & Director6.4yrsUS$18.32m0.036% $10.8m
Jay Hoag
Independent Director8.4yrsUS$353.37k0.077% $23.0m
Lawrence Probst
Non-Executive Chairman25.6yrsUS$369.87k0.20% $60.8m
Leonard Coleman
Independent Director18.7yrsUS$342.37k0.012% $3.5m
Richard Simonson
Independent Director14.1yrsUS$358.91k0.013% $4.0m
Luis Ubiñas
Lead Director4.5yrsUS$375.40k0.00030% $89.3k
Jeffrey Huber
Independent Director10.8yrsUS$342.35k0.028% $8.5m
Heidi Ueberroth
Independent Director2.3yrsUS$334.62k0.0016% $470.2k
Talbott Roche
Independent Director3.7yrsUS$341.78k0.0029% $857.1k

8.4yrs

Average Tenure

56yo

Average Age

Experienced Board: EA's board of directors are considered experienced (8.4 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$29.761b
  • Shares outstanding: 289.67m
  • 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
0IFXLSE (London Stock Exchange)YesCommon StockGBUSDSep 1989
EAWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1989
EA *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1989
ERTETLX (Eurotlx)YesCommon StockITEURSep 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 services across various genres, such as sports, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Anthem, Need for Speed, and Plants v. Zombies brands; and license games, including FIFA, Madden NFL, and Star Wars brands. It also provides advertising services; licenses its games to third parties to distribute and host its games. The company markets and sells its games and services through digital distribution channels, as well as through retail channels, such as mass market retailers, electronics specialty stores, and game software specialty stores. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 23:36
End of Day Share Price2020/02/28 00:00
Earnings2019/12/31
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.