Electronic Arts logged a 1.1% change during today's afternoon session, and is now trading at a price of $137.07 per share.
Electronic Arts returned gains of 10.0% last year, with its stock price reaching a high of $140.3 and a low of $108.53. Over the same period, the stock underperformed the S&P 500 index by -8.0%. As of April 2023, the company's 50-day average price was $129.82. Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. Based in Redwood City, CA, the large-cap Technology company has 13,400 full time employees. Electronic Arts has offered a 0.6% dividend yield over the last 12 months.
Low Leverage Levels but a Declining EPS Growth Trend:
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|---|
Revenue (MM) | $5,150 | $4,950 | $5,537 | $5,629 | $6,991 | $7,426 |
Revenue Growth | n/a | -3.88% | 11.86% | 1.66% | 24.2% | 6.22% |
Gross Margins | 75% | 73% | 75% | 73% | 73% | 76% |
Operating Margins | 28% | 22% | 27% | 19% | 16% | 18% |
Net Margins | 20% | 21% | 55% | 15% | 11% | 11% |
Net Income (MM) | $1,043 | $1,019 | $3,039 | $837 | $789 | $802 |
Net Interest Expense (MM) | $44 | $83 | $63 | $45 | $58 | $58 |
Depreciation & Amort. (MM) | $136 | $145 | $150 | $181 | $486 | $536 |
Earnings Per Share | $3.34 | $3.33 | $10.3 | $2.87 | $2.76 | $2.8800000000000003 |
EPS Growth | n/a | -0.3% | 209.31% | -72.14% | -3.83% | 4.35% |
Diluted Shares (MM) | 312 | 306 | 295 | 292 | 286 | 278 |
Free Cash Flow (MM) | $1,070 | $1,378 | $1,657 | $1,673 | $1,711 | $1,343 |
Capital Expenditures (MM) | $622 | $169 | $140 | $124 | $188 | $207 |
Current Ratio | 2.99 | 2.84 | 2.21 | 1.2 | 1.23 | 1.38 |
Long Term Debt (MM) | $994 | $995 | $609 | $1,878 | $1,879 | $1,881 |
Net Debt / EBITDA | -1.83 | -2.13 | -2.51 | -0.65 | -0.2 | -0.03 |
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Electronic Arts has a trailing twelve month P/E ratio of 35.8, compared to an average of 35.0 for the Technology sector. Based on its EPS guidance of $7.81, the company has a forward P/E ratio of 16.6. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -2.4%. On this basis, the company's PEG ratio is -14.66, which indicates that its shares are overpriced. In contrast, the market is likely undervaluing Electronic Arts in terms of its equity because its P/B ratio is 4.88 while the sector average is 7.92. The company's shares are currently trading 225.1% above their Graham number.
Electronic Arts Has an Average Rating of Buy:
The 24 analysts following Electronic Arts have set target prices ranging from $128.0 to $162.0 per share, for an average of $147.21 with a buy rating. As of April 2023, the company is trading -11.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Electronic Arts has a very low short interest because 1.4% of the company's shares are sold short. Institutions own 95.7% of the company's shares, and the insider ownership rate stands at 0.3%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 10% stake in the company is worth $3,674,530,102.