ELECTRONIC ARTS INC (ERT.DE) Stock Fundamental Analysis
Europe • Frankfurt Stock Exchange • FRA:ERT • US2855121099
173.58 EUR
-0.36 (-0.21%)
Last: Dec 22, 2025, 07:00 PM
We assign a fundamental rating of 5 out of 10 to ERT. ERT was compared to 46 industry peers in the Entertainment industry. While ERT has a great profitability rating, there are some minor concerns on its financial health. ERT has a correct valuation and a medium growth rate.
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 has a Return On Assets of 7.47%. This is amongst the best in the industry. ERT outperforms 84.09% of its industry peers.
- The Return On Equity of ERT (14.75%) is better than 72.73% of its industry peers.
- ERT has a Return On Invested Capital of 10.85%. This is amongst the best in the industry. ERT outperforms 81.82% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ERT is above the industry average of 9.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.47% | ||
| ROE | 14.75% | ||
| ROIC | 10.85% |
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
- With an excellent Profit Margin value of 12.14%, ERT belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
- In the last couple of years the Profit Margin of ERT has declined.
- With an excellent Operating Margin value of 17.11%, ERT belongs to the best of the industry, outperforming 93.18% of the companies in the same industry.
- In the last couple of years the Operating Margin of ERT has declined.
- ERT has a better Gross Margin (78.79%) than 68.18% 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 | 17.11% | ||
| PM (TTM) | 12.14% | ||
| GM | 78.79% |
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
- ERT has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- ERT has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for ERT has been reduced compared to 5 years ago.
- The debt/assets ratio for ERT is higher compared to a year ago.
2.2 Solvency
- ERT has an Altman-Z score of 6.86. This indicates that ERT is financially healthy and has little risk of bankruptcy at the moment.
- ERT's Altman-Z score of 6.86 is amongst the best of the industry. ERT outperforms 88.64% of its industry peers.
- ERT has a debt to FCF ratio of 1.14. This is a very positive value and a sign of high solvency as it would only need 1.14 years to pay back of all of its debts.
- The Debt to FCF ratio of ERT (1.14) is better than 86.36% 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.
- Looking at the Debt to Equity ratio, with a value of 0.25, ERT is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 1.14 | ||
| Altman-Z | 6.86 |
ROIC/WACC1.04
WACC10.44%
2.3 Liquidity
- ERT has a Current Ratio of 0.84. This is a bad value and indicates that ERT is not financially healthy enough and could expect problems in meeting its short term obligations.
- ERT's Current ratio of 0.84 is in line compared to the rest of the industry. ERT outperforms 43.18% of its industry peers.
- A Quick Ratio of 0.84 indicates that ERT may have some problems paying its short term obligations.
- The Quick ratio of ERT (0.84) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
- The earnings per share for ERT have decreased strongly by -21.43% in the last year.
- Measured over the past 5 years, ERT shows a small growth in Earnings Per Share. The EPS has been growing by 6.84% on average per year.
- Looking at the last year, ERT shows a decrease in Revenue. The Revenue has decreased by -1.63% in the last year.
- ERT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.15% yearly.
EPS 1Y (TTM)-21.43%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-43.72%
Revenue 1Y (TTM)-1.63%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%-12.55%
3.2 Future
- Based on estimates for the next years, ERT will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.25% on average per year.
- ERT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.29% yearly.
EPS Next Y30.93%
EPS Next 2Y19.27%
EPS Next 3Y15.83%
EPS Next 5Y9.25%
Revenue Next Year12.89%
Revenue Next 2Y8.18%
Revenue Next 3Y7.2%
Revenue Next 5Y5.29%
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 accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 37.09 indicates a quite expensive valuation of ERT.
- ERT's Price/Earnings ratio is a bit cheaper when compared to the industry. ERT is cheaper than 79.55% of the companies in the same industry.
- When comparing the Price/Earnings ratio of ERT to the average of the S&P500 Index (28.30), we can say ERT is valued slightly more expensively.
- Based on the Price/Forward Earnings ratio of 21.37, the valuation of ERT can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, ERT is valued a bit cheaper than 65.91% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, ERT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.09 | ||
| Fwd PE | 21.37 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as ERT.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERT is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.86 | ||
| EV/EBITDA | 32.99 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- ERT has a very decent profitability rating, which may justify a higher PE ratio.
- ERT's earnings are expected to grow with 15.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.2
PEG (5Y)5.42
EPS Next 2Y19.27%
EPS Next 3Y15.83%
5. Dividend
5.1 Amount
- ERT has a yearly dividend return of 0.37%, which is pretty low.
- ERT's Dividend Yield is a higher than the industry average which is at 0.83.
- Compared to an average S&P500 Dividend Yield of 1.82, ERT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.37% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
- ERT pays out 21.92% of its income as dividend. This is a sustainable payout ratio.
DP21.92%
EPS Next 2Y19.27%
EPS Next 3Y15.83%
ELECTRONIC ARTS INC / ERT.DE FAQ
What is the ChartMill fundamental rating of ELECTRONIC ARTS INC (ERT.DE) stock?
ChartMill assigns a fundamental rating of 5 / 10 to ERT.DE.
What is the valuation status for ERT stock?
ChartMill assigns a valuation rating of 4 / 10 to ELECTRONIC ARTS INC (ERT.DE). This can be considered as Fairly Valued.
What is the profitability of ERT stock?
ELECTRONIC ARTS INC (ERT.DE) has a profitability rating of 7 / 10.
What are the PE and PB ratios of ELECTRONIC ARTS INC (ERT.DE) stock?
The Price/Earnings (PE) ratio for ELECTRONIC ARTS INC (ERT.DE) is 37.09 and the Price/Book (PB) ratio is 8.5.
What is the expected EPS growth for ELECTRONIC ARTS INC (ERT.DE) stock?
The Earnings per Share (EPS) of ELECTRONIC ARTS INC (ERT.DE) is expected to grow by 30.93% in the next year.