NasdaqGS:EA

Stock Analysis Report

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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

Flawless balance sheet with acceptable 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

-4.1%

EA

-2.5%

US Entertainment

-1.3%

US Market


1 Year Return

33.1%

EA

42.9%

US Entertainment

18.5%

US Market

Return vs Industry: EA underperformed the US Entertainment industry which returned 42.9% over the past year.

Return vs Market: EA exceeded the US Market which returned 18.5% over the past year.


Shareholder returns

EAIndustryMarket
7 Day-4.1%-2.5%-1.3%
30 Day-0.7%2.0%5.3%
90 Day-5.9%7.4%7.5%
1 Year33.1%33.1%43.5%42.9%21.3%18.5%
3 Year11.2%11.2%78.9%75.3%42.4%32.9%
5 Year65.9%65.9%99.7%90.6%84.2%63.5%

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?

18.67x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EA ($127.36) is trading above our estimate of fair value ($88.33)

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 (18.7x) compared to the US Entertainment industry average (29.6x).

PE vs Market: EA is good value based on its PE Ratio (18.7x) compared to the US market (19x).


Price to Earnings Growth Ratio

PEG Ratio: EA is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: EA is overvalued based on its PB Ratio (4.7x) compared to the US Entertainment industry average (3.4x).


Next Steps

Future Growth

How is Electronic Arts forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

15.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EA's forecast earnings growth (15.2% per year) is above the savings rate (2.2%).

Earnings vs Market: EA's earnings (15.2% per year) are forecast to grow slower than the US market (22.2% per year).

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

Revenue vs Market: EA's revenue (6.1% per year) is forecast to grow slower than the US market (10.1% per year).

High Growth Revenue: EA's revenue (6.1% 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 (18%).


Next Steps

Past Performance

How has Electronic Arts performed over the past 5 years?

23.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EA has high quality earnings.

Growing Profit Margin: EA's current net profit margins (34.3%) are lower than last year (42.9%).


Past Earnings Growth Analysis

Earnings Trend: EA's earnings have grown significantly by 23.1% 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 (-7.9%) over the past year, making it difficult to compare to the Entertainment industry average (44.6%).


Return on Equity

High ROE: EA's Return on Equity (25.5%) 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 ($6.7B) exceed its short term liabilities ($2.6B).

Long Term Liabilities: EA's short term assets ($6.7B) exceed its long term liabilities ($934.0M).


Debt to Equity History and Analysis

Debt Level: EA's debt to equity ratio (12.8%) is considered satisfactory.

Reducing Debt: EA's debt to equity ratio has reduced from 18.1% to 12.8% over the past 5 years.

Debt Coverage: EA's debt is well covered by operating cash flow (202.5%).

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


Balance Sheet


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 recent payouts.

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

6.3yrs

Average management tenure


CEO

Andrew Wilson (45 yo)

7.08yrs

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 ($USD21.37M) is above average for companies of similar size in the US market ($USD11.20M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Wilson
CEO & Director7.08yrsUS$21.37m0.043%
$ 16.0m
Blake Jorgensen
COO & CFO8.08yrsUS$19.51m0.020%
$ 7.5m
Kenneth Moss
Chief Technology Officer6.25yrsUS$14.26m0.058%
$ 21.2m
Christopher Bruzzo
Chief Marketing Officer6.08yrsUS$7.23m0.0066%
$ 2.4m
Laura Miele
Chief Studios Officer6.33yrsUS$16.08m0.0071%
$ 2.6m
Kenneth Barker
Senior VP & Chief Accounting Officer17.33yrsUS$1.19m0.0029%
$ 1.1m
Chris Evenden
Vice President of Investor Relations6.08yrsno datano data
Jacob Schatz
Executive VP6.33yrsno data0.0064%
$ 2.4m
David Tinson
Senior Vice President of Global Communicationsno datano datano data
Mala Singh
Chief People Officer4yrsno data0.0076%
$ 2.8m
Joel Linzner
Executive Vice President of Worldwide Business Affairsno datano data0.0052%
$ 1.9m
Samantha Smith
Senior VP-EA Mobile & Maxis & Group GM5.08yrsno datano data

6.3yrs

Average Tenure

51yo

Average Age

Experienced Management: EA's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Wilson
CEO & Director7.08yrsUS$21.37m0.043%
$ 16.0m
Jay Hoag
Independent Director9.08yrsUS$353.45k0.065%
$ 24.0m
Lawrence Probst
Independent Non-Executive Chairman26.25yrsUS$369.98k0.17%
$ 61.9m
Leonard Coleman
Independent Director19.33yrsUS$342.48k0.013%
$ 4.6m
Richard Simonson
Independent Director14.75yrsUS$358.89k0.015%
$ 5.5m
Luis Ubinas
Independent Lead Director5.17yrsUS$375.43k0%
$ 0
Jeffrey Huber
Independent Director11.42yrsUS$342.45k0.030%
$ 10.9m
Heidi Ueberroth
Independent Director2.92yrsUS$334.27k0.0016%
$ 581.1k
Talbott Roche
Independent Director4.33yrsUS$342.46k0.0039%
$ 1.4m

9.1yrs

Average Tenure

57yo

Average Age

Experienced Board: EA's board of directors are considered experienced (9.1 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$36.781b
  • Shares outstanding: 288.80m
  • 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 2 REP 1 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 Analysis2020/10/21 00:11
End of Day Share Price2020/10/20 00:00
Earnings2020/06/30
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.