Electronic Arts (EA) is the worst S&P 500 stock Thursday after the video game maker released preliminary results for its fiscal 2025 third quarter and downwardly revised its full-year bookings forecast. At last check, EA stock was down more than 18%.
For its fiscal third quarter, EA said it now expects revenue of approximately $1.883 billion and earnings of roughly $1.11 per share. It had previously guided for revenue in the range of $1.875 billion to $2.025 billion and earnings between 85 cents and $1.02 per share.
"During Q3, we continued to deliver high-quality games and experiences across our portfolio; however, Dragon Age and EA SPORTS FC 25 underperformed our net bookings expectations," said Electronic Arts CEO Andrew Wilson in a statement.
For the full fiscal year, EA now anticipates a mid-single-digit decline in net bookings after initially guiding for mid-single-digit growth. The company pointed to its Global Football unit as the primary reason for the downward revision.
"Global Football had experienced two consecutive fiscal years of double-digit net bookings growth. However, the franchise experienced a slowdown as early momentum in the fiscal third quarter did not sustain through to the end," EA said.
Electronic Arts will release its full fiscal third-quarter earnings report after the market closes on Tuesday, February 4.
Is Electronic Arts stock a buy, sell or hold?
Heading into Thursday's session, Electronic Arts was up 4% on a total return basis (price change plus dividends) in the past 12 months, underperforming the S&P 500's 27% gain. Yet, Wall Street remains bullish on the communication services stock.
According to S&P Global Market Intelligence, the average analyst target price for EA stock is $153.18, representing implied upside of more than 30% to current levels. Additionally, the consensus recommendation is a Buy. However, analysts may revise their ratings and price targets following the company's financial forecast.
Despite Electronic Arts' recent struggles, financial services firm Wedbush late Wednesday reiterated its Outperform rating (equivalent to a Buy) and $173 price target on the large-cap stock.
"EA fumbled badly in Q3 and will be in the penalty box until investors appreciate the magnitude of the earnings shortfall," says Wedbush analyst Michael Pachter. "EA shares may be 'dead money' for another quarter or so, but we remain confident in a rebound once the company provides visibility into its release schedule for fiscal years 2026 and 2027."
