Electronic Arts Intrinsic Value – Electronic Arts Reports Positive Earnings for Q1 FY2024
August 28, 2023
☀️Earnings Overview
On August 1 2023, ELECTRONIC ARTS ($NASDAQ:EA) reported their first quarter FY2024 earnings results, which ended June 30 2023. Revenue had increased 8.9% year-over-year to USD 1924.0 million, and net income had surged 29.3% to USD 402.0 million.
Price History
On Tuesday, Electronic Arts (EA) reported strong earnings for the first quarter of its fiscal year 2024. 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 revenue for the quarter was driven mainly by the continued success of EA’s popular video game franchises such as FIFA, The Sims, and Battlefield. Overall, the company’s first quarter earnings report was a positive one, showing steady and consistent growth in its various divisions.
Investors were pleased with the results and EA’s stock has remained relatively flat since the release of the report. With continued success across its franchises and divisions, Electronic Arts is in a good position to continue building on its already strong performance. 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
At GoodWhale, we have done a comprehensive analysis of ELECTRONIC ARTS‘s financials. After careful consideration, we have come to the conclusion that the fair value of the share is around $155.1. This value has been calculated using our proprietary Valuation Line. Currently, ELECTRONIC ARTS stock is trading at a price of $136.1, which is undervalued by 12.3%. Our analysis suggests that investors should take advantage of this discount in price and buy into the stock. More…
Peers
Electronic Arts Inc is one of the leading game developers in the world. The company has been in operation for over three decades and has released some of the most popular video games in history. Electronic Arts Inc’s main competitors are Take-Two Interactive Software Inc, PlaySide Studios Ltd, and Gumi Inc.
– Take-Two Interactive Software Inc ($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
ELECTRONIC ARTS reported strong first quarter earnings for FY2024, with total revenue increasing 8.9% year-over-year to USD 1924.0 million, and net income increasing 29.3% to USD 402.0 million. This is a positive sign for investors, as the company continues to successfully generate revenue and profit growth. The company’s focus on innovation and expansion of its product offerings have given it a competitive edge. Investors should continue to monitor the company’s future performance to determine if further investment is warranted.
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