With a market cap of $33.7 billion, Electronic Arts Inc. (EA) is a leading global developer, publisher, and distributor of interactive video game content across consoles, PCs, mobile devices, and tablets. With popular franchises like EA SPORTS FC, Battlefield, The Sims, and Apex Legends, EA generates revenue through game sales, downloadable content, subscriptions, microtransactions, and advertising.
Shares of the Redwood City, California-based company have underperformed the broader market over the past 52 weeks. EA has declined 9.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.3%. Moreover, shares of EA are down 11.6% on a YTD basis, compared to SPX’s nearly 4% gain.
Focusing more closely, the video game maker has also lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 32.4% return over the past 52 weeks and an 8.8% YTD gain.
Despite reporting weaker-than-expected Q3 adjusted EPS of $2.83 and bookings of $2.2 billion on Feb. 4, shares of EA jumped over 7% the next day, driven by its $1 billion share repurchase plan. The company maintained its annual bookings forecast despite weaker Q4 guidance of $1.4 billion to $1.6 billion. Additionally, the acquisition of TRACAB Technologies signaled strategic investment in EA’s core sports gaming segment, which remains a strong revenue driver, with American football titles alone projected to exceed $1 billion in net bookings for the fiscal year.
The management’s reassurance of growth in FY26 and beyond, along with the ongoing development of major titles like the Next Battlefield, further contributed to the positive market reaction.
For the fiscal year ending in March 2025, analysts expect EA’s EPS to decline 8.7% year-over-year to $4.75. The company's earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 24 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings and 14 “Holds.”
This configuration is less bullish than three months ago, with 13 “Strong Buy” ratings on the stock.
On Feb. 5, UBS analyst Christopher Schoell lowered the price target for Electronic Arts to $138 and maintained a “Neutral” rating, citing weaker performance in global football and Dragon Age.
As of writing, EA is trading below the mean price target of $147.61. The Street-high price target of $207 implies a potential upside of nearly 60% from the current price levels.
