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Why it's game on for EA

Why it's game on for EA

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Why it's game on for EA

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It was game on for Electronic Arts shares in after-hours action Tuesday.

The video game maker beat earnings on both the top and bottom line and a reported a healthy forward guidance. The company said it earned $0.48 cents per share versus a street estimate of $0.11 cents, as well as first-quarter revenue at $914 million dollars.

Now, shares of the “Titanfall” and “Fifa” maker are up nearly 24 percent since the start of the year, and 55 percent over the past 12 months. So, should you hit play on Electronic Arts?

(Watch: Electronic Arts' healthy beat)

“It’s an exciting time for the gaming industry,” said Robert W. Baird & Co.’s senior research analyst Colin Sebastian. “But for Electronic Arts, we think that approaching this new fiscal year, some of the product momentum is in the rear view mirror.” The company’s highly anticipated “Titanfall” game was released on March 11.

Sebastian’s bottom line, “we like the stock long term, but would rather be a buyer on a pullback.”
Jonathan Krinsky, chief market technician at MKM Partners shares the same long-term sentiment as Sebastian, and thinks EA could rally $20 dollars from current levels over the course of the next few years.

(Read: Electronic Arts climbs on 4Q results and forecast)

“As long as the stock stays about the support area [around $25 dollars per share] you can own the stock and potentially move back up to around $40 per share.”

But Krinsky warned not to hit the play button on EA just yet, “we would be a buyer on a pullback to the $26 area,” which is slightly lower than current levels.

Check out the full discussion on Electronic Arts above from today’s episode of CNBC “Street Signs.”

 

Disclosures:

Robert W. Baird & Co. Incorporated makes a market in the securities of EA

Robert W. Baird & Co. has a rating of “neutral” on EA

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