Electronic Arts Inc (EA, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance and promising growth prospects. With a current share price of $134.72 and a daily gain of 4.56%, despite a three-month decline of -6.04%, the company's robust financial health is evident. A detailed analysis, supported by the GF Score, indicates that Electronic Arts Inc is poised for significant future growth.
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 better returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. For Electronic Arts Inc, the GF Score stands impressively at 92 out of 100, highlighting its strong potential for market outperformance.
- 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 $36.02 billion and annual sales of $7.56 billion, has evolved from a console-based video game publisher to a dominant player across consoles, PC, and mobile platforms. The company boasts a diverse portfolio of top 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 Profitability
Electronic Arts Inc's financial robustness is evident through its Interest Coverage ratio of 54.48 and an Altman Z-Score of 5.35, indicating low risk of financial distress. The company's strategic debt management is reflected in its Debt-to-Revenue ratio of 0.25. These metrics not only demonstrate a solid balance sheet but also align with the principles of prudent financial management.
Electronic Arts Inc's profitability is further underscored by its increasing Operating Margin and Gross Margin, which have consistently improved over the past five years. This trend highlights the company's capability to convert revenue into profit more efficiently year over year.
Growth Trajectory
Electronic Arts Inc's commitment to growth is evident from its Growth Rank of 9/10. The company has demonstrated a solid 13% 3-Year Revenue Growth Rate, outperforming 58.59% of its peers in the Interactive Media industry. This is complemented by a significant increase in EBITDA over the past few years, emphasizing its ongoing growth momentum.
Conclusion
Considering Electronic Arts Inc's strong financial strength, impressive profitability, and consistent growth metrics, the GF Score distinctly highlights the company's superior position for potential market outperformance. Investors looking for robust investment opportunities may find Electronic Arts Inc an attractive option.
For more insights into companies with strong GF Scores, consider exploring our 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.
