Electronic Arts Inc. (EA), headquartered in Redwood City, California, develops, markets, publishes, and delivers games, content, and services for game consoles, PCs, mobile phones, and tablets. Valued at $38.9 billion by market cap, the company also provides advertising services and licenses its games to third parties to distribute and host games.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and EA perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the electronic gaming & multimedia industry. EA leverages its iconic brand portfolio, including Madden, Battlefield, and Apex Legends, to foster customer loyalty and recurring revenue. The successful rebranding to EA SPORTS FC showcases adaptability and strategic franchise management. EA's focus on live services and digital distribution drives its revenue growth, enhancing customer engagement and providing a steady revenue stream beyond initial game sales.
Despite its notable strength, EA slipped 4.6% from its 52-week high of $153.51, achieved on Jul. 31. Over the past three months, EA stock has gained 7.8%, outperforming the S&P 500 Index’s ($SPX) 3.7% gains during the same time frame.
In the longer term, shares of EA rose 7.1% on a YTD basis and climbed 21.6% over the past 52 weeks, underperforming SPX’s YTD gains of 18.1% and solid 26.6% returns over the last year.
However, EA has been trading above its 50-day moving average recently. Also, it has been trading above its 200-day moving average since early June, suggesting a bullish trend.
Broader economic headwinds and elevated inflation pressures largely drove EA’s underwhelming stock performance this year.
On Jul. 30, EA shares closed up marginally after reporting its Q1 results. Its revenue declined 13.7% year over year to 1.7 billion. The company’s EPS came in at $1.04, down 29.3% year over year. EA expects revenue to be between $1.9 billion and $2 billion, and its EPS is expected to be between $0.76 and $0.93.
EA’s rival, PLAYSTUDIOS, Inc. (MYPS), has underperformed EA. MYPS' shares have plummeted 41% in 2024 alone and 52.4% over the past 52 weeks, trailing behind EA’s positive returns for the same periods.
Wall Street analysts are moderately bullish on EA’s prospects. The stock has a consensus “Moderate Buy” rating from the 23 analysts covering it, and the mean price target of $159.79 suggests a potential upside of 9.1% from current price levels.
On the date of publication, Neha Panjwani 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.
