ELECTRONIC ARTS INC (ERT.DE) Stock Fundamental Analysis
Europe - FRA:ERT - US2855121099 - Common Stock
162.78 EUR
-9.08 (-5.28%)
We assign a fundamental rating of 5 out of 10 to ERT. ERT was compared to 45 industry peers in the Entertainment industry. While ERT belongs to the best of the industry regarding profitability, 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.
In the past 5 years ERT has always been profitable.
ERT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.91%, ERT belongs to the best of the industry, outperforming 91.11% of the companies in the same industry.
With a decent Return On Equity value of 17.13%, ERT is doing good in the industry, outperforming 80.00% of the companies in the same industry.
ERT has a Return On Invested Capital of 12.83%. This is amongst the best in the industry. ERT outperforms 84.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ERT is in line with the industry average of 10.27%.
The 3 year average ROIC (12.06%) for ERT is below the current ROIC(12.83%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.91% | ||
| ROE | 17.13% | ||
| ROIC | 12.83% |
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 (13.94%) than 84.44% of its industry peers.
ERT's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.83%, ERT belongs to the top of the industry, outperforming 93.33% of the companies in the same industry.
In the last couple of years the Operating Margin of ERT has declined.
ERT has a Gross Margin of 79.14%. This is in the better half of the industry: ERT outperforms 62.22% of its industry peers.
ERT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.83% | ||
| PM (TTM) | 13.94% | ||
| GM | 79.14% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ERT is creating some value.
The number of shares outstanding for ERT has been reduced compared to 1 year ago.
The number of shares outstanding for ERT has been reduced compared to 5 years ago.
Compared to 1 year ago, ERT has a worse debt to assets ratio.
2.2 Solvency
ERT has an Altman-Z score of 7.10. This indicates that ERT is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ERT (7.10) is better than 91.11% of its industry peers.
The Debt to FCF ratio of ERT is 1.08, which is an excellent value as it means it would take ERT, only 1.08 years of fcf income to pay off all of its debts.
ERT has a better Debt to FCF ratio (1.08) than 91.11% of its industry peers.
ERT has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
ERT's Debt to Equity ratio of 0.24 is fine compared to the rest of the industry. ERT outperforms 75.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 7.1 |
ROIC/WACC1.53
WACC8.39%
2.3 Liquidity
A Current Ratio of 0.84 indicates that ERT may have some problems paying its short term obligations.
With a Current ratio value of 0.84, ERT perfoms like the industry average, outperforming 46.67% of the companies in the same industry.
ERT has a Quick 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 has a Quick ratio (0.84) which 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
ERT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.06%.
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.
The Revenue has been growing slightly by 2.41% in the past year.
The Revenue has been growing slightly by 6.15% on average over the past years.
EPS 1Y (TTM)2.06%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-51.92%
Revenue 1Y (TTM)2.41%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%2.85%
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.
Based on estimates for the next years, ERT will show a small growth in Revenue. The Revenue will grow by 5.24% on average per year.
EPS Next Y26.96%
EPS Next 2Y17.76%
EPS Next 3Y15.28%
EPS Next 5Y9.25%
Revenue Next Year10.74%
Revenue Next 2Y7.69%
Revenue Next 3Y6.98%
Revenue Next 5Y5.24%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ERT is valuated quite expensively with a Price/Earnings ratio of 29.54.
ERT's Price/Earnings ratio is a bit cheaper when compared to the industry. ERT is cheaper than 73.33% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.42. ERT is around the same levels.
ERT is valuated rather expensively with a Price/Forward Earnings ratio of 20.43.
Based on the Price/Forward Earnings ratio, ERT is valued a bit cheaper than the industry average as 68.89% of the companies are valued more expensively.
ERT's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.54 | ||
| Fwd PE | 20.43 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERT indicates a slightly more expensive valuation: ERT is more expensive than 64.44% of the companies listed in the same industry.
ERT's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.09 | ||
| EV/EBITDA | 27.33 |
4.3 Compensation for Growth
ERT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ERT may justify a higher PE ratio.
ERT's earnings are expected to grow with 15.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.1
PEG (5Y)4.32
EPS Next 2Y17.76%
EPS Next 3Y15.28%
5. Dividend
5.1 Amount
ERT has a yearly dividend return of 0.38%, which is pretty low.
ERT's Dividend Yield is a higher than the industry average which is at 2.84.
Compared to an average S&P500 Dividend Yield of 2.36, ERT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
5.2 History
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
18.91% of the earnings are spent on dividend by ERT. This is a low number and sustainable payout ratio.
DP18.91%
EPS Next 2Y17.76%
EPS Next 3Y15.28%
FRA:ERT (10/20/2025, 9:04:29 AM)
162.78
-9.08 (-5.28%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners103.56%
Inst Owner ChangeN/A
Ins Owners0.19%
Ins Owner ChangeN/A
Market Cap40.59B
Analysts71.43
Price Target134.04 (-17.66%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.38% |
Yearly Dividend0.66
Dividend Growth(5Y)N/A
DP18.91%
Div Incr Years0
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)65.17%
Min EPS beat(2)7.97%
Max EPS beat(2)122.37%
EPS beat(4)3
Avg EPS beat(4)30.78%
Min EPS beat(4)-10.5%
Max EPS beat(4)122.37%
EPS beat(8)5
Avg EPS beat(8)17.91%
EPS beat(12)8
Avg EPS beat(12)14.56%
EPS beat(16)10
Avg EPS beat(16)16.44%
Revenue beat(2)1
Avg Revenue beat(2)4.92%
Min Revenue beat(2)-1.89%
Max Revenue beat(2)11.74%
Revenue beat(4)1
Avg Revenue beat(4)0.36%
Min Revenue beat(4)-7.44%
Max Revenue beat(4)11.74%
Revenue beat(8)1
Avg Revenue beat(8)-1.98%
Revenue beat(12)3
Avg Revenue beat(12)-3.38%
Revenue beat(16)5
Avg Revenue beat(16)-2.36%
PT rev (1m)-12.03%
PT rev (3m)-9.05%
EPS NQ rev (1m)-0.57%
EPS NQ rev (3m)-40.1%
EPS NY rev (1m)2.01%
EPS NY rev (3m)2.9%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)-8.12%
Revenue NY rev (1m)0.22%
Revenue NY rev (3m)0.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.54 | ||
| Fwd PE | 20.43 | ||
| P/S | 6.34 | ||
| P/FCF | 27.09 | ||
| P/OCF | 23.99 | ||
| P/B | 7.8 | ||
| P/tB | 112.35 | ||
| EV/EBITDA | 27.33 |
EPS(TTM)5.51
EY3.38%
EPS(NY)7.97
Fwd EY4.89%
FCF(TTM)6.01
FCFY3.69%
OCF(TTM)6.78
OCFY4.17%
SpS25.66
BVpS20.88
TBVpS1.45
PEG (NY)1.1
PEG (5Y)4.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.91% | ||
| ROE | 17.13% | ||
| ROCE | 17.12% | ||
| ROIC | 12.83% | ||
| ROICexc | 15.81% | ||
| ROICexgc | 81.17% | ||
| OM | 19.83% | ||
| PM (TTM) | 13.94% | ||
| GM | 79.14% | ||
| FCFM | 23.41% |
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 Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.08 | ||
| Debt/EBITDA | 0.81 | ||
| Cap/Depr | 63.66% | ||
| Cap/Sales | 3.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 107.57% | ||
| Profit Quality | 167.95% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 7.1 |
F-Score7
WACC8.39%
ROIC/WACC1.53
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)2.06%
EPS 3Y-1.54%
EPS 5Y6.84%
EPS Q2Q%-51.92%
EPS Next Y26.96%
EPS Next 2Y17.76%
EPS Next 3Y15.28%
EPS Next 5Y9.25%
Revenue 1Y (TTM)2.41%
Revenue growth 3Y2.2%
Revenue growth 5Y6.15%
Sales Q2Q%2.85%
Revenue Next Year10.74%
Revenue Next 2Y7.69%
Revenue Next 3Y6.98%
Revenue Next 5Y5.24%
EBIT growth 1Y0.61%
EBIT growth 3Y10.34%
EBIT growth 5Y1.57%
EBIT Next Year36.3%
EBIT Next 3Y16.39%
EBIT Next 5Y12.34%
FCF growth 1Y-2.45%
FCF growth 3Y2.79%
FCF growth 5Y2.32%
OCF growth 1Y-0.55%
OCF growth 3Y3.06%
OCF growth 5Y2.96%