Electronic Arts Valuation
| EA Stock | USD 127.27 1.64 1.31% |
At this time, the firm appears to be undervalued. Electronic Arts shows a prevailing Real Value of $137.38 per share. The current price of the firm is $127.27. Our model computes the value of Electronic Arts from reviewing the firm fundamentals such as Profit Margin of 0.14 %, shares outstanding of 267.35 M, and Current Valuation of 33.14 B as well as analyzing its technical indicators and probability of bankruptcy. In general, most investors advise taking in undervalued instruments and trading overvalued instruments since, at some point, asset prices and their ongoing real values will submerge. Key fundamental drivers impacting Electronic Arts' valuation include:
Price Book 4.5389 | Enterprise Value 33.1 B | Enterprise Value Ebitda 16.5363 | Price Sales 4.4654 | Forward PE 16.9205 |
Undervalued
Today
Please note that Electronic Arts' price fluctuation is very steady at this time. Calculation of the real value of Electronic Arts is based on 3 months time horizon. Increasing Electronic Arts' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Electronic Arts is useful when determining the fair value of the Electronic stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Electronic Arts. Since Electronic Arts is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Electronic Stock. However, Electronic Arts' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 127.27 | Real 137.38 | Target 143.73 | Hype 127.2 |
The real value of Electronic Stock, also known as its intrinsic value, is the underlying worth of Electronic Arts Company, which is reflected in its stock price. It is based on Electronic Arts' financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Electronic Arts' stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Electronic Arts' stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of Electronic Arts helps investors to forecast how Electronic stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Electronic Arts more accurately as focusing exclusively on Electronic Arts' fundamentals will not take into account other important factors: Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Electronic Arts' intrinsic value based on its ongoing forecasts of Electronic Arts' financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Electronic Arts' closest peers. When choosing an evaluation method for Electronic Arts, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.
Electronic Arts Investments |
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Electronic Valuation Trend
Knowing Electronic Arts' actual value is paramount for traders to make sound investment determinations. Electronic Arts' real value is not only important for the investor to make better decisions but also for a more accurate overall view of Electronic Arts' financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Electronic Arts' enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.
Electronic Market Cap
Electronic Arts is rated # 2 in market capitalization category among related companies. Market capitalization of Communication Services industry is currently estimated at about 83.46 Billion. Electronic Arts totals roughly 34.03 Billion in market capitalization claiming about 41% of stocks in Communication Services industry.Electronic Arts Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining Electronic Arts's current stock value. Our valuation model uses many indicators to compare Electronic Arts value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Electronic Arts competition to find correlations between indicators driving Electronic Arts's intrinsic value. More Info.Electronic Arts is one of the top stocks in price to earning category among related companies. It is one of the top stocks in price to book category among related companies fabricating about 0.11 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Electronic Arts is roughly 8.84 . The current year's Price To Book Ratio is expected to grow to 5.43. Comparative valuation analysis is a catch-all model that can be used if you cannot value Electronic Arts by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Electronic Arts' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Electronic Arts' earnings, one of the primary drivers of an investment's value.Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Electronic Arts' worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Electronic Arts and how it compares across the competition.
About Electronic Arts Valuation
The stock valuation mechanism determines the current worth of Electronic Arts on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Electronic Arts. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Electronic Arts based exclusively on its fundamental and basic technical indicators. By analyzing Electronic Arts's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Electronic Arts's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Electronic Arts. We calculate exposure to Electronic Arts's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Electronic Arts's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 6.5 B | 6.8 B | |
| Pretax Profit Margin | 0.16 | 0.09 | |
| Operating Profit Margin | 0.16 | 0.09 | |
| Net Profit Margin | 0.1 | 0.07 | |
| Gross Profit Margin | 0.68 | 0.47 |
8 Steps to conduct Electronic Arts' Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Electronic Arts' potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Electronic Arts' valuation analysis, follow these 8 steps:- Gather financial information: Obtain Electronic Arts' financial statements, including balance sheets, income statements, and cash flow statements.
- Determine Electronic Arts' revenue streams: Identify Electronic Arts' primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research Electronic Arts' industry and market trends, including the size of the market, growth rate, and competition.
- Establish Electronic Arts' growth potential: Evaluate Electronic Arts' management, business model, and growth potential.
- Determine Electronic Arts' financial performance: Analyze its financial statements to assess its historical performance and future potential.
- Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
- Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Electronic Arts' estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
A single share of Electronic Arts represents a small ownership stake in the entity. As a stockholder of Electronic, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
Electronic Arts Dividends Analysis For Valuation
The current year's Dividend Paid And Capex Coverage Ratio is expected to grow to 488.25, whereas Dividends Paid is forecasted to decline to about 169.7 M. . At present, Electronic Arts' Retained Earnings are projected to increase significantly based on the last few years of reporting. The current year's Retained Earnings Total Equity is expected to grow to about 8.9 B, whereas Earnings Yield is forecasted to decline to 0.02.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | 241.5 M | 169.7 M | |
| Dividend Yield | 0.01 | 0.01 | |
| Dividend Payout Ratio | 0.30 | 0.29 | |
| Dividend Paid And Capex Coverage Ratio | 465.00 | 488.25 |
There are various types of dividends Electronic Arts can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Electronic shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Electronic Arts directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Electronic pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Electronic Arts by the value of the dividends paid out.
Electronic Arts Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Electronic Arts does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 278 M | |
| Quarterly Earnings Growth Y O Y | 0.466 | |
| Forward Price Earnings | 16.9205 |
Electronic Arts Current Valuation Indicators
Valuation refers to the process of determining the present value of Electronic Arts and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Electronic we look at many different elements of the entity such as Electronic's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Electronic Arts' valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Electronic Arts' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
| Book Value Per Share | ||
| Tangible Book Value Per Share | ||
| Enterprise Value Over E B I T D A | ||
| Net Current Asset Value |
Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in Electronic Arts. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in nation. For information on how to trade Electronic Stock refer to our How to Trade Electronic Stock guide.Note that the Electronic Arts information on this page should be used as a complementary analysis to other Electronic Arts' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Complementary Tools for Electronic Stock analysis
When running Electronic Arts' price analysis, check to measure Electronic Arts' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Electronic Arts is operating at the current time. Most of Electronic Arts' value examination focuses on studying past and present price action to predict the probability of Electronic Arts' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Electronic Arts' price. Additionally, you may evaluate how the addition of Electronic Arts to your portfolios can decrease your overall portfolio volatility.
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Is Electronic Arts' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Electronic Arts. If investors know Electronic will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Electronic Arts listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.466 | Dividend Share 0.76 | Earnings Share 3.97 | Revenue Per Share 28.177 | Quarterly Revenue Growth 0.034 |
The market value of Electronic Arts is measured differently than its book value, which is the value of Electronic that is recorded on the company's balance sheet. Investors also form their own opinion of Electronic Arts' value that differs from its market value or its book value, called intrinsic value, which is Electronic Arts' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Electronic Arts' market value can be influenced by many factors that don't directly affect Electronic Arts' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Electronic Arts' value and its price as these two are different measures arrived at by different means. Investors typically determine if Electronic Arts is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Electronic Arts' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.