Valued at a market cap of $38 billion, Electronic Arts Inc. (EA) develops, markets, publishes, and delivers games, content, and services for game consoles, PCs, mobile phones, and tablets. The Redwood City, California-based company’s portfolio spans multiple genres, including sports, racing, first-person shooters, action, role-playing, and simulation games. It is scheduled to announce its fiscal Q4 earnings for 2025 after the market closes on Tuesday, May 6.
Ahead of this event, analysts expect this electronic gaming company to report a profit of $0.60 per share, down 34.8% from $0.92 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in two of the last four quarters while missing on two other occasions. In Q3, EA’s EPS of $2.34 fell short of the forecasted figure by nearly 5.7%.
For fiscal 2025, analysts expect EA to report a profit of $4.64 per share, down 10.8% from $5.20 in fiscal 2024. Nevertheless, its EPS is expected to rebound in fiscal 2026, growing by 17.7% year over year to $5.46.
Shares of EA have soared almost 14.8% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 5.5% gain, and the Communication Services Select Sector SPDR Fund’s (XLC) 13.7% rise over the same time frame.
EA released its Q3 results on Feb. 4. Despite delivering a weaker-than-expected performance, its shares surged 7.6% in the following trading session. The company’s net revenue declined 3.2% year-over-year to $1.9 billion, largely due to weaker performance in its live services and other segment. Net bookings also fell 6.4% from the prior year, totaling $2.2 billion.
Nonetheless, on a positive note, EA's adjusted operating margin improved to 30.1%, up from 28.4% in the same quarter last year, signaling better cost efficiency. The company's American Football games saw strong momentum, with weekly active users rising by double digits year-over-year in Q3. It also announced a $1 billion accelerated share repurchase plan, reflecting confidence in its long-term strategy, which might have further bolstered investor confidence.
For fiscal 2025, EA expects net revenue to be between $7.3 billion to $7.4 billion, and anticipates EPS in the range of $3.90 to $4.25.
Wall Street analysts are moderately optimistic about Electronic Arts’ stock, with a "Moderate Buy" rating overall. Among 26 analysts covering the stock, 10 recommend "Strong Buy," one suggests a “Moderate Buy,” and 15 advise “Hold.” As of writing, EA is trading marginally above its mean price target of $145.44, and its Street-high price target of $179 indicates a 22.7% potential upside from the current levels.
On the date of publication, Neharika Jain 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.
