ELECTRONIC ARTS INC (EA)
US2855121099 - Common Stock
Overall EA gets a fundamental rating of 6 out of 10. We evaluated EA against 72 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making EA a very profitable company, without any liquidiy or solvency issues. EA is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year EA was profitable.
In the past year EA had a positive cash flow from operations.
In the past 5 years EA has always been profitable.
In the past 5 years EA always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.96%, EA belongs to the top of the industry, outperforming 87.32% of the companies in the same industry.
Looking at the Return On Equity, with a value of 14.12%, EA belongs to the top of the industry, outperforming 84.51% of the companies in the same industry.
EA has a Return On Invested Capital of 10.39%. This is amongst the best in the industry. EA outperforms 83.10% of its industry peers.
EA had an Average Return On Invested Capital over the past 3 years of 9.83%. This is significantly below the industry average of 86.07%.
The 3 year average ROIC (9.83%) for EA is below the current ROIC(10.39%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.96% | ||
| ROE | 14.12% | ||
| ROIC | 10.39% |
ROA(3y)7.05%
ROA(5y)10.96%
ROE(3y)12.76%
ROE(5y)17.94%
ROIC(3y)9.83%
ROIC(5y)9.75%
1.3 Margins
The Profit Margin of EA (14.12%) is better than 87.32% of its industry peers.
EA's Profit Margin has declined in the last couple of years.
EA has a Operating Margin of 20.64%. This is amongst the best in the industry. EA outperforms 90.14% of its industry peers.
EA's Operating Margin has been stable in the last couple of years.
EA has a better Gross Margin (78.57%) than 94.37% of its industry peers.
In the last couple of years the Gross Margin of EA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.64% | ||
| PM (TTM) | 14.12% | ||
| GM | 78.57% |
OM growth 3Y5.5%
OM growth 5Y1.35%
PM growth 3Y4.22%
PM growth 5Y-3.94%
GM growth 3Y1.85%
GM growth 5Y1.15%
2. Health
2.1 Basic Checks
EA has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, EA has less shares outstanding
EA has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, EA has a worse debt to assets ratio.
2.2 Solvency
EA has an Altman-Z score of 5.95. This indicates that EA is financially healthy and has little risk of bankruptcy at the moment.
EA has a better Altman-Z score (5.95) than 91.55% of its industry peers.
The Debt to FCF ratio of EA is 0.95, which is an excellent value as it means it would take EA, only 0.95 years of fcf income to pay off all of its debts.
EA has a Debt to FCF ratio of 0.95. This is amongst the best in the industry. EA outperforms 84.51% of its industry peers.
EA has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of EA (0.25) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 5.95 |
ROIC/WACC1.17
WACC8.9%
2.3 Liquidity
EA has a Current Ratio of 1.43. This is a normal value and indicates that EA is financially healthy and should not expect problems in meeting its short term obligations.
EA has a better Current ratio (1.43) than 60.56% of its industry peers.
EA has a Quick Ratio of 1.43. This is a normal value and indicates that EA is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.43, EA is doing good in the industry, outperforming 61.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
EA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.51%.
Measured over the past years, EA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.27% on average per year.
The Revenue has decreased by -2.42% in the past year.
EA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.84% yearly.
EPS 1Y (TTM)-2.51%
EPS 3Y6.36%
EPS 5Y10.27%
EPS Q2Q%47.26%
Revenue 1Y (TTM)-2.42%
Revenue growth 3Y10.34%
Revenue growth 5Y8.84%
Sales Q2Q%14.23%
3.2 Future
Based on estimates for the next years, EA will show a small growth in Earnings Per Share. The EPS will grow by 6.64% on average per year.
Based on estimates for the next years, EA will show a small growth in Revenue. The Revenue will grow by 4.15% on average per year.
EPS Next Y14.16%
EPS Next 2Y12.21%
EPS Next 3Y11.83%
EPS Next 5Y6.64%
Revenue Next Year2.14%
Revenue Next 2Y3.98%
Revenue Next 3Y4.75%
Revenue Next 5Y4.15%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.30, EA is valued on the expensive side.
77.46% of the companies in the same industry are more expensive than EA, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.55. EA is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 17.09, which indicates a rather expensive current valuation of EA.
EA's Price/Forward Earnings ratio is rather cheap when compared to the industry. EA is cheaper than 81.69% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.00. EA is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.3 | ||
| Fwd PE | 17.09 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as EA.
81.69% of the companies in the same industry are more expensive than EA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.77 | ||
| EV/EBITDA | 19.39 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EA has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.5
PEG (5Y)2.07
EPS Next 2Y12.21%
EPS Next 3Y11.83%
5. Dividend
5.1 Amount
EA has a yearly dividend return of 0.51%, which is pretty low.
EA's Dividend Yield is rather good when compared to the industry average which is at 3.63. EA pays more dividend than 83.10% of the companies in the same industry.
With a Dividend Yield of 0.51, EA pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
5.2 History
EA has been paying a dividend for over 5 years, so it has already some track record.
EA has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years4
5.3 Sustainability
19.41% of the earnings are spent on dividend by EA. This is a low number and sustainable payout ratio.
DP19.41%
EPS Next 2Y12.21%
EPS Next 3Y11.83%
ELECTRONIC ARTS INC
NASDAQ:EA (12/26/2024, 8:08:13 PM)
After market: 149 -0.07 (-0.05%)149.07
-0.11 (-0.07%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners98.98%
Inst Owner Change-0.45%
Ins Owners0.18%
Ins Owner Change0.25%
Market Cap39.10B
Analysts77.84
Price Target165.17 (10.8%)
Short Float %2.43%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.51% |
Dividend Growth(5Y)N/A
DP19.41%
Div Incr Years3
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.18%
Min EPS beat(2)3.27%
Max EPS beat(2)21.09%
EPS beat(4)2
Avg EPS beat(4)2.52%
Min EPS beat(4)-12.28%
Max EPS beat(4)21.09%
EPS beat(8)5
Avg EPS beat(8)6.5%
EPS beat(12)7
Avg EPS beat(12)9.31%
EPS beat(16)11
Avg EPS beat(16)10.76%
Revenue beat(2)0
Avg Revenue beat(2)-2.78%
Min Revenue beat(2)-4.61%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-4.55%
Min Revenue beat(4)-8.76%
Max Revenue beat(4)-0.95%
Revenue beat(8)1
Avg Revenue beat(8)-5.2%
Revenue beat(12)3
Avg Revenue beat(12)-3.11%
Revenue beat(16)5
Avg Revenue beat(16)-3.55%
PT rev (1m)1.58%
PT rev (3m)1.74%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.3%
EPS NY rev (1m)-1.08%
EPS NY rev (3m)1.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.3 | ||
| Fwd PE | 17.09 | ||
| P/S | 5.28 | ||
| P/FCF | 19.77 | ||
| P/OCF | 17.79 | ||
| P/B | 5.28 | ||
| P/tB | 23.26 | ||
| EV/EBITDA | 19.39 |
EPS(TTM)7
EY4.7%
EPS(NY)8.72
Fwd EY5.85%
FCF(TTM)7.54
FCFY5.06%
OCF(TTM)8.38
OCFY5.62%
SpS28.25
BVpS28.25
TBVpS6.41
PEG (NY)1.5
PEG (5Y)2.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.96% | ||
| ROE | 14.12% | ||
| ROCE | 14.77% | ||
| ROIC | 10.39% | ||
| ROICexc | 13.81% | ||
| ROICexgc | 52.2% | ||
| OM | 20.64% | ||
| PM (TTM) | 14.12% | ||
| GM | 78.57% | ||
| FCFM | 26.7% |
ROA(3y)7.05%
ROA(5y)10.96%
ROE(3y)12.76%
ROE(5y)17.94%
ROIC(3y)9.83%
ROIC(5y)9.75%
ROICexc(3y)13.97%
ROICexc(5y)19.66%
ROICexgc(3y)86.06%
ROICexgc(5y)96.94%
ROCE(3y)13.99%
ROCE(5y)13.87%
ROICexcg growth 3Y-1.5%
ROICexcg growth 5YN/A
ROICexc growth 3Y-4.05%
ROICexc growth 5Y-22.03%
OM growth 3Y5.5%
OM growth 5Y1.35%
PM growth 3Y4.22%
PM growth 5Y-3.94%
GM growth 3Y1.85%
GM growth 5Y1.15%
F-Score7
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.95 | ||
| Debt/EBITDA | 0.96 | ||
| Cap/Depr | 50.81% | ||
| Cap/Sales | 2.97% | ||
| Interest Coverage | 27.3 | ||
| Cash Conversion | 112.03% | ||
| Profit Quality | 189.1% | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.43 | ||
| Altman-Z | 5.95 |
F-Score7
WACC8.9%
ROIC/WACC1.17
Cap/Depr(3y)42.19%
Cap/Depr(5y)57.68%
Cap/Sales(3y)2.7%
Cap/Sales(5y)2.57%
Profit Quality(3y)183.51%
Profit Quality(5y)164.26%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.51%
EPS 3Y6.36%
EPS 5Y10.27%
EPS Q2Q%47.26%
EPS Next Y14.16%
EPS Next 2Y12.21%
EPS Next 3Y11.83%
EPS Next 5Y6.64%
Revenue 1Y (TTM)-2.42%
Revenue growth 3Y10.34%
Revenue growth 5Y8.84%
Sales Q2Q%14.23%
Revenue Next Year2.14%
Revenue Next 2Y3.98%
Revenue Next 3Y4.75%
Revenue Next 5Y4.15%
EBIT growth 1Y0.66%
EBIT growth 3Y16.41%
EBIT growth 5Y10.31%
EBIT Next Year18.61%
EBIT Next 3Y11.87%
EBIT Next 5Y7.88%
FCF growth 1Y25.59%
FCF growth 3Y5.34%
FCF growth 5Y8.18%
OCF growth 1Y22.93%
OCF growth 3Y6.18%
OCF growth 5Y8.4%