Electronic Arts Inc.

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SKU: EA Category:

Description

The dynamics of gaming industry are changing rapidly after Microsoft’s recent acquisition of Activision Blizzard for a phenomenal valuation. One would expect Activision’s rival, Electronic Arts to gain a valuation premium after this event especially given that the company’s financial performance has been decent. EA’s live services across its portfolio have delivered strong recurring revenue and year-over-year growth in the previous quarter and it remains fundamentally strong. Despite a difficult Battlefield launch, they came within a few percent of their net booking guidance and exceeded their underlying profitability expectations. Moreover, Apex Legends, EA SPORTS titles, The Sims, and other Apex franchises have a broad appeal. The company is also increasing total player engagement, net bookings, and underlying profitability as they expand to more ways to play across more platforms and business models. Despite Battlefield 2042’s failure to meet the company’s expectations, they are on track to deliver a decent financial year. EA also announced a new agreement with Disney and Lucasfilm Games to create new experiences in the Star Wars universe, continuing their ten-year partnership. We are optimistic about Electronic Arts’ growth prospects and give it an ‘Outperform’ rating with a revised target price.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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