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Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
11.7%
Sector: -1.4%
Dividend Analysis audit
GROWTH
0.38%
Trailing Yield
$0.38
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
27%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ELECTRONIC ARTS INC. (EA) receives a "Hold" rating with a composite score of 48.7/100, ranked #449 out of 4446 stocks. Key factor scores: Quality 50/100, Value 38/100, Momentum 55/100. This is quantitative analysis only — not investment advice.
ELECTRONIC ARTS INC. (EA) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ELECTRONIC ARTS INC. Do?
Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for game consoles, PCs, mobile phones, and tablets worldwide. It develops and publishes games and services across various genres, such as sports, racing, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Need for Speed, and Plants vs. Zombies brands; and license games from others, including FIFA, Madden NFL, UFC, NHL, Formula 1, and Star Wars brands. The company also provides advertising services; and licenses its games to third parties to distribute and host its games. It markets and sells its games and services through digital distribution and retail channels, as well as directly to mass market retailers, specialty stores, and distribution arrangements. Electronic Arts Inc. was incorporated in 1982 and is headquartered in Redwood City, California. ELECTRONIC ARTS INC. (EA) is classified as a large-cap stock in the Technology sector, specifically within the Computer Software industry. The company is led by CEO Andrew P. Wilson and employs approximately 12,900 people, headquartered in Redwood City, California. With a market capitalization of $50.9B, EA is one of the prominent companies in the Technology sector.
ELECTRONIC ARTS INC. (EA) Stock Rating — Hold (April 2026)
As of April 2026, ELECTRONIC ARTS INC. receives a Hold rating with a composite score of 48.7/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.EA ranks #449 out of 4,446 stocks in our coverage universe. Within the Technology sector, ELECTRONIC ARTS INC. ranks #26 of 584 stocks, placing it in the top 10% of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
EA Stock Price and 52-Week Range
ELECTRONIC ARTS INC. (EA) currently trades at $202.30. The stock gained $0.10 (0.0%) in the most recent trading session. The 52-week high for EA is $204.88, which means the stock is currently trading -1.3% from its annual peak. The 52-week low is $131.15, putting the stock 54.3% above its annual trough. Recent trading volume was 0 shares, suggesting relatively thin trading activity.
Is EA Overvalued or Undervalued? — Valuation Analysis
ELECTRONIC ARTS INC. (EA) carries a value factor score of 38/100 in the Blank Capital model, signaling premium valuation that prices in significant future growth. The trailing price-to-earnings ratio is 70.99x, compared to the Technology sector average of 45.27x — a premium of 57%. The price-to-book ratio stands at 8.30x, versus the sector average of 3.16x. The price-to-sales ratio is 7.00x, compared to 1.06x for the average Technology stock. On an enterprise value basis, EA trades at 52.35x EV/EBITDA, versus 12.79x for the sector. The EV/EBIT multiple is 48.79x.
At current multiples, ELECTRONIC ARTS INC. trades at a premium to most Technology peers. This elevated valuation may be justified if the company can sustain above-average growth rates and profitability, but it also creates downside risk if earnings disappoint expectations.
ELECTRONIC ARTS INC. Profitability — ROE, Margins, and Quality Score
ELECTRONIC ARTS INC. (EA) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 11.7%, compared to the Technology sector average of -1.4%, which is within a healthy range. Return on assets (ROA) comes in at 5.4% versus the sector average of -1.0%.
On a margin basis, ELECTRONIC ARTS INC. reports gross margins of 77.2%, compared to 50.9% for the sector. The operating margin is 13.5% (sector: -0.5%). Net profit margin stands at 9.9%, versus -1.5% for the average Technology stock. Revenue growth is running at -6.1% on a trailing basis, compared to 14.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
EA Debt, Balance Sheet, and Financial Health
ELECTRONIC ARTS INC. has a debt-to-equity ratio of 116.0%, compared to the Technology sector average of 43.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 0.93x, which may signal near-term liquidity tightness. Total debt on the balance sheet is $1.89B.
EA has a beta of 0.54, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ELECTRONIC ARTS INC. is 92/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ELECTRONIC ARTS INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, ELECTRONIC ARTS INC. reported revenue of $7.29B and earnings per share (EPS) of $0.35. Net income for the quarter was $719M. Gross margin was 77.2%. Operating income came in at $975M.
In Q3 2026, ELECTRONIC ARTS INC. reported revenue of $1.90B and earnings per share (EPS) of $0.35. Net income for the quarter was $88M. Gross margin was 73.8%. Revenue grew 1.0% year-over-year compared to Q3 2025. Operating income came in at $127M.
In Q2 2026, ELECTRONIC ARTS INC. reported revenue of $1.84B and earnings per share (EPS) of $0.55. Net income for the quarter was $137M. Gross margin was 75.9%. Revenue grew -9.2% year-over-year compared to Q2 2025. Operating income came in at $200M.
In Q1 2026, ELECTRONIC ARTS INC. reported revenue of $1.67B and earnings per share (EPS) of $0.80. Net income for the quarter was $201M. Gross margin was 83.3%. Revenue grew 0.7% year-over-year compared to Q1 2025. Operating income came in at $271M.
Over the past 8 quarters, ELECTRONIC ARTS INC. has demonstrated a growth trajectory, with revenue expanding from $1.66B to $7.29B. Investors analyzing EA stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
EA Dividend Yield and Income Analysis
ELECTRONIC ARTS INC. (EA) currently pays a dividend yield of 0.4%. At this yield, a $10,000 investment in EA stock would generate approximately $$38.00 in annual dividend income. The net margin of 9.9% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
EA Momentum and Technical Analysis Profile
ELECTRONIC ARTS INC. (EA) has a momentum factor score of 55/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 35/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 15/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
EA vs Competitors — Technology Sector Ranking and Peer Comparison
Comparing EA against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full EA vs S&P 500 (SPY) comparison to assess how ELECTRONIC ARTS INC. stacks up against the broader market across all factor dimensions.
EA Next Earnings Date
No upcoming earnings date has been announced for ELECTRONIC ARTS INC. (EA) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy EA? — Investment Thesis Summary
ELECTRONIC ARTS INC. presents a balanced picture with arguments on both sides. The value score of 38/100 indicates premium valuation. Low volatility (stability score 92/100) reduces downside risk.
In summary, ELECTRONIC ARTS INC. (EA) earns a Hold rating with a composite score of 48.7/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on EA stock.
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Institutional Research Dossier
ELECTRONIC ARTS INC. (EA) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Electronic Arts (EA) receives a Hold rating, driven by a mixed financial performance and a valuation that appears stretched relative to its growth prospects. While EA boasts strong gross and operating margins compared to the technology sector, its recent revenue decline and high P/E and EV/EBITDA multiples raise concerns about its current valuation. The company's stability and established franchises provide a degree of downside protection, but significant growth catalysts are needed to justify a more bullish outlook.
The primary concern revolves around EA's high valuation metrics juxtaposed with its recent revenue contraction. The company's reliance on a few key franchises and the inherent volatility of the gaming industry contribute to uncertainty. While EA's strong profitability metrics and free cash flow generation are positives, the current valuation suggests that much of the potential upside is already priced in, warranting a cautious approach.
Business Strategy & Overview
Electronic Arts operates as a developer, publisher, and distributor of video games and related content across various platforms, including consoles, PCs, and mobile devices. The company's revenue streams are diversified across digital distribution, retail sales, and licensing agreements. EA's core strategy revolves around developing and maintaining a portfolio of popular franchises, such as FIFA (soon to be EA Sports FC), Madden NFL, Apex Legends, and The Sims. These franchises serve as recurring revenue generators, supported by annual releases, downloadable content, and in-game purchases.
A key aspect of EA's strategy is its focus on digital distribution, which allows for higher margins and direct engagement with consumers. The company invests heavily in online services and subscription models, such as EA Play, to enhance player engagement and generate recurring revenue. EA also leverages its intellectual property through licensing agreements, allowing third parties to develop and distribute games based on its franchises.
EA's product pipeline includes both established franchises and new intellectual properties. The company continuously invests in research and development to innovate and create new gaming experiences. EA also acquires studios and intellectual property to expand its portfolio and strengthen its competitive position. The company's strategic partnerships with sports leagues, such as the NFL and FIFA, are crucial for maintaining its dominance in the sports gaming genre.
The gaming industry is characterized by intense competition and rapid technological advancements. EA faces competition from other major publishers, such as Activision Blizzard, Take-Two Interactive, and Ubisoft, as well as emerging players in the mobile gaming space. The company must adapt to changing consumer preferences and technological trends, such as cloud gaming and esports, to remain competitive. EA's success depends on its ability to create compelling gaming experiences, effectively monetize its franchises, and navigate the evolving landscape of the gaming industry.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-6.1%
Sector: 14.2%
-143% VS SCTR
Economic Moat Analysis
Electronic Arts possesses a Narrow economic moat, primarily derived from its established brands and exclusive licensing agreements. The company's portfolio of popular franchises, such as FIFA (EA Sports FC), Madden NFL, and The Sims, enjoys strong brand recognition and loyal customer bases. These franchises create a degree of customer captivity, as players are often willing to pay a premium for the latest installment or downloadable content.
EA's exclusive licensing agreements with sports leagues, such as the NFL and FIFA, provide a significant competitive advantage. These agreements grant EA the exclusive right to develop and publish games based on these leagues, effectively preventing competitors from offering similar products. The exclusivity of these licenses creates a barrier to entry and allows EA to maintain its dominance in the sports gaming genre.
However, EA's moat is not as wide as some of its competitors due to the inherent volatility of the gaming industry and the potential for disruption from new technologies and emerging players. The success of a game is highly dependent on its quality and reception by players, and even established franchises can experience periods of decline. The rise of mobile gaming and free-to-play models has also increased competition and reduced the barriers to entry for new players.
Furthermore, the increasing cost of game development and marketing can erode EA's profitability and reduce its ability to invest in new franchises. The company must continuously innovate and adapt to changing consumer preferences to maintain its competitive advantage. While EA's established brands and exclusive licenses provide a degree of protection, its moat is vulnerable to disruption and requires ongoing investment and innovation to maintain its strength.
Financial Health & Profitability
EA's financial health presents a mixed picture. While the company exhibits strong profitability metrics, its revenue growth has been inconsistent, and its valuation appears stretched. The company's gross margin of 77.2% and operating margin of 13.5% are significantly higher than the technology sector averages of 51.2% and -0.5%, respectively, indicating efficient cost management and strong pricing power. However, the company's revenue growth of -6.1% is significantly lower than the sector average of 14.0%, raising concerns about its ability to generate sustainable growth.
EA's return on equity (ROE) of 11.7% is also higher than the sector average of -1.5%, indicating efficient use of shareholder equity. The company's debt-to-equity ratio of 116.00 is higher than the sector average of 43.00, suggesting a higher level of financial leverage. However, the company's strong free cash flow generation of $1.67 billion provides ample capacity to service its debt obligations.
Analyzing the quarterly financial history reveals a trend of fluctuating revenue and net income. While gross margins have remained relatively stable, operating margins have varied significantly, reflecting changes in marketing expenses and development costs. The company's current ratio of 0.93 indicates a slight liquidity risk, as its current liabilities exceed its current assets. However, the company's strong free cash flow generation mitigates this risk.
Overall, EA's financial health is characterized by strong profitability and cash flow generation, but its revenue growth and valuation are areas of concern. The company's high debt-to-equity ratio also warrants monitoring. While EA's financial performance is generally solid, its stretched valuation suggests that much of the potential upside is already priced in.
Valuation Assessment
EA's valuation appears stretched based on several key metrics. The company's P/E ratio of 572.9x is significantly higher than the technology sector average of 45.3x, indicating that investors are paying a substantial premium for its earnings. Similarly, its EV/EBITDA ratio of 98.8x is much higher than the sector average of 13.0x, suggesting that the company is overvalued relative to its earnings before interest, taxes, depreciation, and amortization.
The company's free cash flow yield, while positive, is not particularly compelling given its high valuation. The market capitalization of $50.18 billion and free cash flow of $1.67 billion imply a FCF yield of approximately 3.3%, which is relatively low compared to other companies in the technology sector. This suggests that investors are not receiving a significant return on their investment in terms of free cash flow.
Comparing EA's valuation to its historical performance reveals that the company is currently trading at a premium to its historical averages. While EA's strong brand recognition and established franchises justify a premium valuation, the current multiples appear excessive given its recent revenue decline and inconsistent growth. The company's valuation is also sensitive to changes in investor sentiment and market conditions, which could lead to significant price volatility.
Given the high valuation multiples and the company's recent financial performance, EA's stock appears to be fairly valued to slightly overvalued. While the company's strong profitability and cash flow generation are positives, the current valuation suggests that much of the potential upside is already priced in. Investors should exercise caution and carefully consider the risks and uncertainties associated with EA's business before investing in its stock.
Risk & Uncertainty
Electronic Arts faces several specific risks that could impact its financial performance and stock price. One of the primary risks is the company's reliance on a few key franchises, such as FIFA (EA Sports FC), Madden NFL, and Apex Legends. A decline in the popularity or quality of these franchises could significantly reduce EA's revenue and profitability. The company must continuously innovate and invest in new content to maintain the appeal of its franchises.
Another risk is the intense competition in the gaming industry. EA faces competition from other major publishers, as well as emerging players in the mobile gaming space. The company must effectively compete on price, quality, and innovation to maintain its market share. The rise of new gaming platforms and technologies, such as cloud gaming and esports, also poses a competitive threat to EA.
EA's licensing agreements with sports leagues, such as the NFL and FIFA, are subject to renewal and renegotiation. The loss of these licenses could significantly impact EA's revenue and competitive position. The company must maintain strong relationships with its licensing partners to ensure the renewal of these agreements on favorable terms.
The gaming industry is also subject to regulatory scrutiny, particularly regarding loot boxes and in-game purchases. Changes in regulations could impact EA's ability to monetize its games and services. The company must comply with all applicable regulations and adapt its business practices to avoid legal and reputational risks.
Bulls Say / Bears Say
The Bull Case
BULL VIEWEA's strong portfolio of established franchises provides a stable revenue base and significant growth opportunities through downloadable content and in-game purchases.
BULL VIEWThe company's focus on digital distribution and subscription models enhances player engagement and generates recurring revenue, leading to higher margins and improved profitability.
BULL VIEWEA's exclusive licensing agreements with major sports leagues provide a significant competitive advantage and create a barrier to entry for new players.
The Bear Case
BEAR VIEWEA's high valuation multiples are not justified by its recent revenue decline and inconsistent growth, suggesting that the stock is overvalued.
BEAR VIEWThe company's reliance on a few key franchises makes it vulnerable to changes in consumer preferences and the potential for disruption from new games.
BEAR VIEWIncreasing competition in the gaming industry and the rising cost of game development could erode EA's profitability and reduce its ability to invest in new franchises.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score EA and 4,400+ other equities.
ELECTRONIC ARTS INC. exhibits a 272% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
5.4%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
77.2%
Sector: 50.9%
Operating Margin
Core business profitability
13.5%
Sector: -0.5%
Net Margin
Bottom-line profitability
9.9%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $38 annually in dividends at the current trailing rate.
