Electronic Arts Inc (EA, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. Currently trading at $150.7 per share, Electronic Arts Inc has experienced a slight daily decrease of 0.37%, yet it maintains a positive three-month change of 2.06%. A detailed analysis, supported by the GF Score, indicates that Electronic Arts Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. These aspects have been proven to correlate strongly with long-term stock performance from 2006 to 2021. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. Electronic Arts Inc boasts a GF Score of 93, indicating a strong potential for market outperformance.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 6/10
- Momentum rank: 7/10
Understanding Electronic Arts Inc's Business
Electronic Arts Inc, with a market cap of $39.52 billion and annual sales of $7.41 billion, has evolved from a console-based video game publisher to a dominant player across consoles, PC, and mobile platforms. The company is renowned for its blockbuster franchises such as Madden, EA Sports FC (formerly FIFA), Battlefield, and Apex Legends. Operating with a margin of 19.69%, Electronic Arts Inc demonstrates robust profitability and operational efficiency.
Financial Strength Breakdown
Electronic Arts Inc's financial resilience is evident through its Financial Strength rating. An Interest Coverage ratio of 48.63 significantly surpasses Benjamin Graham's recommended threshold, highlighting its capability to meet interest obligations comfortably. Furthermore, an Altman Z-Score of 6 indicates low risk of financial distress, and a Debt-to-Revenue ratio of 0.25 showcases prudent debt management.
Profitability and Growth Metrics
Electronic Arts Inc's profitability is underscored by its impressive Profitability Rank. The company's Operating Margin has shown consistent improvement, indicative of its increasing efficiency in revenue conversion. Growth prospects are equally promising, with a 3-Year Revenue Growth Rate of 13%, outperforming a significant portion of its industry peers.
Conclusion
Considering Electronic Arts Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore other high-performing companies using 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.
