ELECTRONIC ARTS INC (ERT.DE) Stock Fundamental Analysis
FRA:ERT - Deutsche Boerse Ag - US2855121099 - Common Stock - Currency: EUR
We assign a fundamental rating of 6 out of 10 to ERT. ERT was compared to 44 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making ERT a very profitable company, without any liquidiy or solvency issues. ERT has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
ERT had positive earnings in the past year.
ERT had a positive operating cash flow in the past year.
Each year in the past 5 years ERT has been profitable.
In the past 5 years ERT always reported a positive cash flow from operatings.
1.2 Ratios
ERT has a better Return On Assets (7.96%) than 85.00% of its industry peers.
ERT's Return On Equity of 14.12% is fine compared to the rest of the industry. ERT outperforms 62.50% of its industry peers.
ERT has a Return On Invested Capital of 10.39%. This is in the better half of the industry: ERT outperforms 72.50% of its industry peers.
ERT had an Average Return On Invested Capital over the past 3 years of 9.83%. This is in line with the industry average of 8.82%.
The 3 year average ROIC (9.83%) for ERT 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
ERT's Profit Margin of 14.12% is amongst the best of the industry. ERT outperforms 82.50% of its industry peers.
In the last couple of years the Profit Margin of ERT has declined.
With an excellent Operating Margin value of 20.64%, ERT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
ERT's Operating Margin has been stable in the last couple of years.
ERT's Gross Margin of 78.57% is fine compared to the rest of the industry. ERT outperforms 65.00% of its industry peers.
In the last couple of years the Gross Margin of ERT 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERT is still creating some value.
The number of shares outstanding for ERT has been reduced compared to 1 year ago.
Compared to 5 years ago, ERT has less shares outstanding
ERT has a worse debt/assets ratio than last year.
2.2 Solvency
ERT has an Altman-Z score of 5.17. This indicates that ERT is financially healthy and has little risk of bankruptcy at the moment.
ERT has a better Altman-Z score (5.17) than 90.00% of its industry peers.
The Debt to FCF ratio of ERT is 0.95, which is an excellent value as it means it would take ERT, only 0.95 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ERT (0.95) is better than 92.50% of its industry peers.
ERT has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
ERT has a Debt to Equity ratio of 0.25. This is in the better half of the industry: ERT outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 5.17 |
ROIC/WACC1.18
WACC8.78%
2.3 Liquidity
A Current Ratio of 1.43 indicates that ERT should not have too much problems paying its short term obligations.
ERT has a better Current ratio (1.43) than 77.50% of its industry peers.
A Quick Ratio of 1.43 indicates that ERT should not have too much problems paying its short term obligations.
ERT has a Quick ratio of 1.43. This is in the better half of the industry: ERT outperforms 77.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
ERT 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, ERT 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.
Measured over the past years, ERT shows a quite strong growth in Revenue. The Revenue has been growing by 8.84% on average per year.
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
ERT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.64% yearly.
Based on estimates for the next years, ERT will show a small growth in Revenue. The Revenue will grow by 4.15% on average per year.
EPS Next Y5.29%
EPS Next 2Y8.25%
EPS Next 3Y10.11%
EPS Next 5Y6.64%
Revenue Next Year1.97%
Revenue Next 2Y3.97%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.87, which indicates a rather expensive current valuation of ERT.
Based on the Price/Earnings ratio, ERT is valued a bit cheaper than 80.00% of the companies in the same industry.
ERT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.47.
Based on the Price/Forward Earnings ratio of 15.40, the valuation of ERT can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERT indicates a somewhat cheap valuation: ERT is cheaper than 67.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.74, ERT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.87 | ||
| Fwd PE | 15.4 |
4.2 Price Multiples
ERT's Enterprise Value to EBITDA is on the same level as the industry average.
ERT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERT is cheaper than 67.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.58 | ||
| EV/EBITDA | 15.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ERT does not grow enough to justify the current Price/Earnings ratio.
ERT has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.38
PEG (5Y)1.74
EPS Next 2Y8.25%
EPS Next 3Y10.11%
5. Dividend
5.1 Amount
With a yearly dividend of 0.64%, ERT is not a good candidate for dividend investing.
The stock price of ERT dropped by -20.54% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 2.26, ERT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, ERT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
5.2 History
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 ERT. This is a low number and sustainable payout ratio.
DP19.41%
EPS Next 2Y8.25%
EPS Next 3Y10.11%
ELECTRONIC ARTS INC
FRA:ERT (2/5/2025, 3:30:29 PM)
121
+4.32 (+3.7%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners98.98%
Inst Owner ChangeN/A
Ins Owners0.18%
Ins Owner ChangeN/A
Market Cap31.73B
Analysts76.76
Price Target148.61 (22.82%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.64% |
Yearly Dividend0.76
Dividend Growth(5Y)N/A
DP19.41%
Div Incr Years3
Div Non Decr Years4
Ex-DateN/A
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)-5.69%
Revenue beat(12)3
Avg Revenue beat(12)-3.44%
Revenue beat(16)5
Avg Revenue beat(16)-3.79%
PT rev (1m)-7.32%
PT rev (3m)-0.74%
EPS NQ rev (1m)-9.78%
EPS NQ rev (3m)-6.8%
EPS NY rev (1m)-7.76%
EPS NY rev (3m)-6.97%
Revenue NQ rev (1m)-7.53%
Revenue NQ rev (3m)-7.53%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.87 | ||
| Fwd PE | 15.4 | ||
| P/S | 4.43 | ||
| P/FCF | 16.58 | ||
| P/OCF | 14.92 | ||
| P/B | 4.43 | ||
| P/tB | 19.51 | ||
| EV/EBITDA | 15.59 |
EPS(TTM)6.77
EY5.6%
EPS(NY)7.86
Fwd EY6.49%
FCF(TTM)7.3
FCFY6.03%
OCF(TTM)8.11
OCFY6.7%
SpS27.33
BVpS27.33
TBVpS6.2
PEG (NY)3.38
PEG (5Y)1.74
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 | 5.17 |
F-Score7
WACC8.78%
ROIC/WACC1.18
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 Y5.29%
EPS Next 2Y8.25%
EPS Next 3Y10.11%
EPS Next 5Y6.64%
Revenue 1Y (TTM)-2.42%
Revenue growth 3Y10.34%
Revenue growth 5Y8.84%
Sales Q2Q%14.23%
Revenue Next Year1.97%
Revenue Next 2Y3.97%
Revenue Next 3Y4.75%
Revenue Next 5Y4.15%
EBIT growth 1Y0.66%
EBIT growth 3Y16.41%
EBIT growth 5Y10.31%
EBIT Next Year19.54%
EBIT Next 3Y11.99%
EBIT Next 5Y8.55%
FCF growth 1Y25.59%
FCF growth 3Y5.34%
FCF growth 5Y8.18%
OCF growth 1Y22.93%
OCF growth 3Y6.18%
OCF growth 5Y8.4%