ELECTRONIC ARTS INC (ERT.DE) Stock Fundamental Analysis
FRA:ERT - Deutsche Boerse Ag - US2855121099 - Common Stock - Currency: EUR
ERT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 45 industry peers in the Entertainment industry. ERT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ERT has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ERT had positive earnings in the past year.
In the past year ERT had a positive cash flow from operations.
ERT had positive earnings in each of the past 5 years.
In the past 5 years ERT always reported a positive cash flow from operatings.
1.2 Ratios
ERT's Return On Assets of 9.06% is amongst the best of the industry. ERT outperforms 88.89% of its industry peers.
Looking at the Return On Equity, with a value of 17.55%, ERT is in the better half of the industry, outperforming 75.56% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.27%, ERT belongs to the top of the industry, outperforming 84.44% of the companies in the same industry.
ERT had an Average Return On Invested Capital over the past 3 years of 12.06%. This is above the industry average of 9.32%.
The 3 year average ROIC (12.06%) for ERT is below the current ROIC(13.27%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.06% | ||
| ROE | 17.55% | ||
| ROIC | 13.27% |
ROA(3y)8.17%
ROA(5y)7.3%
ROE(3y)15.16%
ROE(5y)13.3%
ROIC(3y)12.06%
ROIC(5y)10.47%
1.3 Margins
ERT has a better Profit Margin (15.02%) than 84.44% of its industry peers.
In the last couple of years the Profit Margin of ERT has declined.
Looking at the Operating Margin, with a value of 21.13%, ERT belongs to the top of the industry, outperforming 91.11% of the companies in the same industry.
ERT's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 79.32%, ERT is doing good in the industry, outperforming 68.89% of the companies in the same industry.
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 | 21.13% | ||
| PM (TTM) | 15.02% | ||
| GM | 79.32% |
OM growth 3Y7.96%
OM growth 5Y-4.32%
PM growth 3Y10%
PM growth 5Y-22.83%
GM growth 3Y2.54%
GM growth 5Y1.05%
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
Compared to 1 year ago, ERT has a worse debt to assets ratio.
2.2 Solvency
ERT has an Altman-Z score of 5.72. This indicates that ERT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ERT (5.72) is better than 91.11% of its industry peers.
The Debt to FCF ratio of ERT is 1.01, which is an excellent value as it means it would take ERT, only 1.01 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.01, ERT belongs to the top of the industry, outperforming 91.11% of the companies in the same industry.
ERT has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.23, ERT is doing good in the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | 5.72 |
ROIC/WACC1.54
WACC8.63%
2.3 Liquidity
A Current Ratio of 0.95 indicates that ERT may have some problems paying its short term obligations.
ERT's Current ratio of 0.95 is fine compared to the rest of the industry. ERT outperforms 64.44% of its industry peers.
ERT has a Quick Ratio of 0.95. This is a bad value and indicates that ERT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.95, ERT is in the better half of the industry, outperforming 64.44% of the companies in the same industry.
The current and quick ratio evaluation for ERT is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
The earnings per share for ERT have decreased by -3.17% in the last year.
ERT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.84% yearly.
Looking at the last year, ERT shows a decrease in Revenue. The Revenue has decreased by -1.31% in the last year.
The Revenue has been growing slightly by 6.15% on average over the past years.
EPS 1Y (TTM)-3.17%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-11.68%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%7.98%
3.2 Future
ERT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.25% yearly.
ERT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.10% yearly.
EPS Next Y25.31%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
EPS Next 5Y9.25%
Revenue Next Year9.67%
Revenue Next 2Y7.61%
Revenue Next 3Y6.52%
Revenue Next 5Y4.1%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 23.55, ERT is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of ERT indicates a somewhat cheap valuation: ERT is cheaper than 80.00% of the companies listed in the same industry.
ERT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 18.81 indicates a rather expensive valuation of ERT.
Based on the Price/Forward Earnings ratio, ERT is valued a bit cheaper than 71.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, ERT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.55 | ||
| Fwd PE | 18.81 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERT is on the same level as its industry peers.
ERT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERT is cheaper than 64.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.35 | ||
| EV/EBITDA | 20.28 |
4.3 Compensation for Growth
ERT's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ERT may justify a higher PE ratio.
A more expensive valuation may be justified as ERT's earnings are expected to grow with 14.98% in the coming years.
PEG (NY)0.93
PEG (5Y)3.44
EPS Next 2Y17.6%
EPS Next 3Y14.98%
5. Dividend
5.1 Amount
ERT has a yearly dividend return of 0.49%, which is pretty low.
ERT's Dividend Yield is a higher than the industry average which is at 1.87.
With a Dividend Yield of 0.49, ERT pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
ERT pays out 17.75% of its income as dividend. This is a sustainable payout ratio.
DP17.75%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
FRA:ERT (7/2/2025, 7:00:00 PM)
134.26
-1.56 (-1.15%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners102.66%
Inst Owner ChangeN/A
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap33.67B
Analysts75.79
Price Target149.22 (11.14%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
Yearly Dividend0.65
Dividend Growth(5Y)N/A
DP17.75%
Div Incr Years0
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.26%
Min EPS beat(2)-10.5%
Max EPS beat(2)7.97%
EPS beat(4)3
Avg EPS beat(4)5.46%
Min EPS beat(4)-10.5%
Max EPS beat(4)21.09%
EPS beat(8)5
Avg EPS beat(8)3.61%
EPS beat(12)8
Avg EPS beat(12)9.46%
EPS beat(16)10
Avg EPS beat(16)9.74%
Revenue beat(2)1
Avg Revenue beat(2)2.15%
Min Revenue beat(2)-7.44%
Max Revenue beat(2)11.74%
Revenue beat(4)1
Avg Revenue beat(4)-0.32%
Min Revenue beat(4)-7.44%
Max Revenue beat(4)11.74%
Revenue beat(8)1
Avg Revenue beat(8)-2.19%
Revenue beat(12)4
Avg Revenue beat(12)-0.18%
Revenue beat(16)6
Avg Revenue beat(16)-1.15%
PT rev (1m)12.07%
PT rev (3m)12.15%
EPS NQ rev (1m)-2.23%
EPS NQ rev (3m)-80.54%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)9.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.91%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)3.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.55 | ||
| Fwd PE | 18.81 | ||
| P/S | 5.32 | ||
| P/FCF | 21.35 | ||
| P/OCF | 19.08 | ||
| P/B | 6.21 | ||
| P/tB | 55.33 | ||
| EV/EBITDA | 20.28 |
EPS(TTM)5.7
EY4.25%
EPS(NY)7.14
Fwd EY5.32%
FCF(TTM)6.29
FCFY4.68%
OCF(TTM)7.04
OCFY5.24%
SpS25.26
BVpS21.61
TBVpS2.43
PEG (NY)0.93
PEG (5Y)3.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.06% | ||
| ROE | 17.55% | ||
| ROCE | 17.7% | ||
| ROIC | 13.27% | ||
| ROICexc | 17.75% | ||
| ROICexgc | 119.2% | ||
| OM | 21.13% | ||
| PM (TTM) | 15.02% | ||
| GM | 79.32% | ||
| FCFM | 24.9% |
ROA(3y)8.17%
ROA(5y)7.3%
ROE(3y)15.16%
ROE(5y)13.3%
ROIC(3y)12.06%
ROIC(5y)10.47%
ROICexc(3y)16.76%
ROICexc(5y)16.45%
ROICexgc(3y)98.03%
ROICexgc(5y)99%
ROCE(3y)16.08%
ROCE(5y)13.96%
ROICexcg growth 3Y5.86%
ROICexcg growth 5Y-3.33%
ROICexc growth 3Y13.37%
ROICexc growth 5Y-15.13%
OM growth 3Y7.96%
OM growth 5Y-4.32%
PM growth 3Y10%
PM growth 5Y-22.83%
GM growth 3Y2.54%
GM growth 5Y1.05%
F-Score7
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.01 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 62.08% | ||
| Cap/Sales | 2.96% | ||
| Interest Coverage | 28.16 | ||
| Cash Conversion | 107.55% | ||
| Profit Quality | 165.75% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | 5.72 |
F-Score7
WACC8.63%
ROIC/WACC1.54
Cap/Depr(3y)49.99%
Cap/Depr(5y)51.43%
Cap/Sales(3y)2.79%
Cap/Sales(5y)2.65%
Profit Quality(3y)166.47%
Profit Quality(5y)186.51%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.17%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-11.68%
EPS Next Y25.31%
EPS Next 2Y17.6%
EPS Next 3Y14.98%
EPS Next 5Y9.25%
Revenue 1Y (TTM)-1.31%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%7.98%
Revenue Next Year9.67%
Revenue Next 2Y7.61%
Revenue Next 3Y6.52%
Revenue Next 5Y4.1%
EBIT growth 1Y-4.42%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.25%
EBIT Next 3Y14.8%
EBIT Next 5Y11.53%
FCF growth 1Y-12.19%
FCF growth 3Y2.79%
FCF growth 5Y2.32%
OCF growth 1Y-10.19%
OCF growth 3Y3.06%
OCF growth 5Y2.96%