Electronic Arts Inc (EA, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $135.06 and a modest daily gain of 0.49%, despite a three-month decline of -5.15%, the company shows promising signs of future growth. A detailed analysis, supported by the GF Score, positions Electronic Arts Inc for significant advancement in the coming years.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, designed to predict stock performance by evaluating five key aspects of a company's financials. This system, which has been backtested from 2006 to 2021, suggests that stocks with higher GF Scores typically yield better returns. For Electronic Arts Inc, the GF Score is an impressive 92 out of 100, indicating a strong potential for market outperformance based on its financial strength, profitability, growth, GF Value, and momentum.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 7/10
- Momentum rank: 5/10
Understanding Electronic Arts Inc's Business
Electronic Arts Inc, with a market cap of $35.98 billion and annual sales of $7.56 billion, has evolved from a console-based video game publisher to a dominant force across consoles, PC, and mobile platforms. The company boasts a portfolio of major franchises such as Madden, EA Sports FC, Battlefield, and Apex Legends. Its operating margin stands at 20.89%, reflecting efficient management and strong profitability.
Financial Strength and Stability
Electronic Arts Inc's financial robustness is evident through its Interest Coverage ratio of 35.91 and an Altman Z-Score of 5.51, indicating low risk of financial distress. The company's strategic debt management is highlighted by a Debt-to-Revenue ratio of 0.26, showcasing its prudent financial practices.
Profitability and Growth Metrics
Electronic Arts Inc's profitability is underscored by a consistent increase in its Operating Margin over the past five years, with the latest figure at 20.89%. The company's Gross Margin also reflects an upward trend, demonstrating its ability to efficiently convert sales into profits. Furthermore, its 3-Year Revenue Growth Rate of 13% signifies ongoing business expansion.
Conclusion: A Promising Outlook for Electronic Arts Inc
Considering Electronic Arts Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
