What does the future hold for the Gaming Industry? (EA:NSD)

Electronic Arts

Electronic Arts Inc Stock Forecast:

Based on the Electronic Arts Inc stock forecasts from 26 analysts, the average target price for the stock is USD 139.20 in the next 12 months. The average analyst rating is “Buy.” However, Stock Target Advisor‘s analysis of the company is “Slightly Bearish,” based on 5 positive signals and 8 negative signals. Electronic Arts Inc’s current stock price is USD 116.76, which has decreased by 8.47% in the past week, 4.44% in the past month, and 10.14% in the past year.

Electronic Arts Inc. News:

Electronic Arts,  made an announcement on Wednesday that they had not met their sales targets during the holiday season and their projections for next year were lower than anticipated. The company also revealed that they were canceling the mobile versions of two of their most popular games, Apex Legends and Battlefield. This is expected to lead to job cuts, but the exact number has not been disclosed. Additionally, Electronic Arts announced that they would be delaying the release of Star Wars Jedi Survivor from March to late April. The entire gaming industry has been affected by the pandemic, with people spending more time playing games while at home, causing an increase in demand for these products. However, unlike other tech industries, the gaming sector has not seen the same recovery. The future of the gaming industry appears to be challenging.

Analysts Coverage Change:

Truist Financial maintains a Buy rating on Electronic Arts Inc. and lowers the price target to $130 from $150 on the company’s stock.

J.P. Morgan Chase & Co. maintains the price target of $125.

Jefferies & Co. lowers the price target to $147 from $165 and maintains the Buy rating for the stock.

Positive Fundamentals:

Electronic Arts Inc.(EA:NSD) stock is attractive to investors due to its high market capitalization, low volatility, superior return on equity, and positive cash flow. As one of the largest entities in its sector, Electronic Arts Inc. has a strong and stable presence in the market. This is reflected in its low volatility, with annual returns that are stable and consistent compared to its sector peers. The company’s management has also demonstrated a strong ability to generate returns, with a superior return on equity in the most recent four quarters. Additionally, the company has had positive total cash flow and positive total free cash flow in the most recent four quarters, indicating a healthy financial position. Overall, these factors make Electronic Arts Inc. stock a potentially attractive investment opportunity for those looking for stability and strong financial performance.

Negative Fundamentals:

Electronic Arts Inc. stock has underperformed compared to its peers in terms of total returns over the past 5 years. The stock is considered overpriced based on several financial metrics, including price to earnings, price to book value, price to cash flow, and price to free cash flow. The stock is trading above the median for its sector, which may cause investors to proceed with caution when considering buying. The company is highly leveraged and has shown below median earnings and revenue growth in the previous 5 years compared to its sector. This suggests that the company may not be growing as fast as its peers and may be more susceptible to economic downturns or other risks.

FA Score (Fundamental Analysis):

The fundamental analysis of Electronic Arts Inc. is “Slightly Bearish” with a FA score of 3.8 out of 10, where 0 is very bearish and 10 is very bullish.

 

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