With a market cap of $39.6 billion, Electronic Arts, Inc. (EA) is a leading developer, marketer, publisher, and distributor of interactive games like Dead Space, Star Wars Jedi, Titanfall, etc. Based in California, EA distributes its content through multiple channels, including online portals like Origin and Play4Free. Its games are also available on consoles, PCs, mobile devices, tablets, and e-readers.
Shares of this videogame titan have slightly underperformed the broader market over the past 52 weeks. EA has surged 26.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27.8%. In 2024, EA stock rose 9.5%, lagging behind SPX's 17.8% rise.
Zooming in further, EA has also struggled to keep up with the Invesco Next Gen Media and Gaming ETF’s (GGME) 44.8% return over the past year and a 24.2% gain on a YTD basis.
Shares of Electronic Arts rose marginally on Aug. 16 after the company released EA SPORTS™ Madden NFL 25. The game is available on PlayStation 5, Xbox Series X|S, and PC, featuring the latest FieldSENSE™ technology and the all-new BOOM Tech. This dynamic physics-based tackling system enhances player control. To keep the experience fresh, EA plans to implement post-launch live service updates to introduce exciting new content throughout the year.
Moreover, on Jul. 30, Electronic Arts reported a strong start to fiscal year 2025, with Q1 net bookings exceeding expectations at $1.26 billion. The company launched a $5 billion stock repurchase program to return value to shareholders over the next three years. Additionally, the company's focus on online engagement, storytelling, and community-driven strategies has driven significant growth in its sports titles, like EA SPORTS FC '24, Madden NFL 24, and F1 '24. As a result, its stock edged up 1.2% in the subsequent trading session.
For the current fiscal year, ending in March 2025, analysts expect Electronic Arts' EPS to expand 13.1% year over year to $5.88. However, the company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while falling short on another occasion. The company surpassed the consensus earnings estimate by 200% in the recent quarter.
Among the 23 analysts assessing EA stock, the consensus rating is "Moderate Buy." That's based on 10 "Strong Buy" ratings, two “Moderate Buys,” and 11 "Holds.”
This configuration has been stable over the past months.
On July 31, TD Cowen raised its price target on Electronic Arts from $163 to $183 and maintained a “Buy” rating on the shares. This price boost follows EA’s solid Q1 results that exceeded expectations for both revenue and earnings, driven by strong performance from Madden NFL.
The mean price target of $158.92 represents a premium of 6.1% from EA's current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
