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Electronic Arts Inc. (ERTS) Message Board

  • mickrsm mickrsm Sep 11, 2006 5:09 PM Flag

    5 Reasons Why P/E Doesn't Matter

    1) ERTS is a cyclical growth stock
    2) The next video game cycle is just getting underway
    3) The P/E (ttm) has ranged between 25 and 95 over the last 10 years.
    4) The P/E (ftm) has ranged between 20 and 110 over the last 10 years.
    5) Preliminary sales data for the months of July and August have exceeded both analyst and company expectations by healthy margins.

    There is ZERO correlation between P/E ratio and significant price movement in this stock. Any coincidence can be attributed to cyclical ups and dows of the video game sector. You folks who keep obsessing over P/E ratios are ignoring the fact that EPS estimates are just that: ESTIMATES. When a company has little else aside from sales contributing to earnings, it is very simple to figure out if the bar is being set too low. You haven't done your research.

    If you have, please share. I'm sure the numerous people who actually have done their own research would be interested in seeing your numbers.

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