Electronic Arts Intrinsic Value Calculation – ELECTRONIC ARTS Reports First Quarter Earnings Results for FY2024
August 27, 2023
🌥️Earnings Overview
On August 1 2023, ELECTRONIC ARTS ($NASDAQ:EA) released its earnings results for the first quarter of FY2024, ending June 30 2023. The company saw a total revenue of USD 1924.0 million – an 8.9% increase from the same period in the previous year – while reported net income rose by 29.3%.
Stock Price
The company’s stock opened at $135.5 and closed at $136.1, down by 0.2% from its previous closing price of 136.4. The company was able to achieve these results by focusing on their core business—providing high quality digital entertainment products to consumers—and by making strategic investments in new technologies such as artificial intelligence and virtual reality. The positive results were also attributed to the company’s commitment to providing a secure and reliable platform for customers to buy their products online, making it easier for them to access the latest games and other products.
Overall, the first quarter of ELECTRONIC ARTS‘ fiscal year 2024 was a success, with the company reporting strong growth in both revenues and profits. This is a positive sign that the company has a robust strategy for continued success and growth in the coming quarters. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Electronic Arts. More…
| Total Revenues | Net Income | Net Margin |
| 7.58k | 893 | 12.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Electronic Arts. More…
| Operations | Investing | Financing |
| 1.99k | -196 | -1.61k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Electronic Arts. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 13.08k | 5.75k | 26.95 |
Key Ratios Snapshot
Some of the financial key ratios for Electronic Arts are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.4% | 0.9% | 19.6% |
| FCF Margin | ROE | ROA |
| 23.7% | 12.7% | 7.1% |
Analysis – Electronic Arts Intrinsic Value Calculation
GoodWhale’s analysis of ELECTRONIC ARTS‘s financials has determined that the fair value of ELECTRONIC ARTS share is around $155.1. This calculation was made by using our proprietary Valuation Line. Currently, ELECTRONIC ARTS’ stock is being traded at $136.1, a price which is undervalued by 12.3%. This suggests that there are potential opportunities for investors to make a profit from buying at the current price. More…
Peers
Electronic Arts Inc is one of the leading game developers in the world. The company has been in operation for over three decades and has released some of the most popular video games in history. Electronic Arts Inc’s main competitors are Take-Two Interactive Software Inc, PlaySide Studios Ltd, and Gumi Inc.
– Take-Two Interactive Software Inc ($NASDAQ:TTWO)
Take-Two Interactive Software Inc is a publicly traded video game holding company based in New York City. The company owns two major publishing labels, Rockstar Games and 2K, itself composed of multiple studios. Its Grand Theft Auto, Red Dead, and NBA 2K franchises are among the most successful and well-known in the video game industry.
– PlaySide Studios Ltd ($ASX:PLY)
Sides Studios Ltd is a publicly traded company with a market capitalization of 215.5 million as of 2022. The company has a return on equity of 7.79%. Side Studios is a leading provider of 3D animation and visual effects for the film and television industry. The company has worked on some of the most popular films and television shows of the past decade, including The Lord of the Rings trilogy, The Chronicles of Narnia, and Game of Thrones.
– Gumi Inc ($TSE:3903)
Gumi Inc is a Japanese company that specializes in the development and publishing of mobile games. The company has a market cap of 27.96B as of 2022 and a Return on Equity of -33.77%. Gumi Inc’s games are available on both iOS and Android devices, and some of their most popular titles include Brave Frontier, Final Fantasy: Brave Exvius, and Attack on Titan: Assault.
Summary
Investors in Electronic Arts should be pleased with the company’s first quarter performance for FY2024, as it reported an 8.9% year-over-year increase in total revenue to USD 1924.0 million. The reported net income of USD 402.0 million was also impressive, representing a 29.3% improvement year-over-year. The strong showing demonstrates Electronic Arts’ ability to capitalize on its existing portfolio of games, as well as its ability to develop and launch new titles successfully. Going forward, the company’s outlook is bright and investors should remain confident in its ability to continue producing above-average financial results.
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