EA

Electronic Arts, Inc.

TMT


Presented:04/29/2020
Price:$112.78
Cap:$32.67B
Current Price:$146.42
Cap:$38.68B

Presented

Date04/29/2020
Price$112.78
Market Cap$32.67B
Ent Value$27.24B
P/E Ratio11.87x
Book Value$24.90
Div Yield0%
Shares O/S289.67M
Ave Daily Vol3,999,233
Short Int2.20%

Current

Price$146.42
Market Cap$38.68B
Electronic Arts, Inc. engages in the provision of digital interactive entertainment. It develops and delivers games, content, and online services for Internet-connected consoles, mobile devices, and personal computers. It operates through the North America and International geographical segments. The company was founded by William M. Hawkins III and William Gordon in 1982 and is headquartered in Redwood City, CA.

Publicly traded companies mentioned herein: Activision Blizzard Inc (ATVI), Electronic Arts Inc (EA), Zynga Inc (ZNGA)

Highlights

The presenter is bullish on the performance of all video game companies during the COVID-19 pandemic and cautions investors against aggressively shorting these names before their next earnings dates. On the other hand, he thinks Electronic Arts Inc (EA)’s risk/reward profile is skewed to the downside. EA is currently trading at ~$115 per share and he believes its share price is range-bound at $80 – $120. For the full-year FY2021 (began March 31, 2020), his positive Q1 outlook and concerns regarding the rest of the year put his $5 EPS estimate in line with the Street. Yet, he doesn’t think the company deserves a 2021 earnings multiple above 22x given a lack of upside. Further, the presenter notes that if EA’s games start missing on numbers later in the year and/or other issues arise, the stock’s multiple could fall to the mid-teen range and share prices could test the lower bound of his $80 – $120 range. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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