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Electronic Arts Inc. (ERTS) Message Board

  • valuepdx valuepdx Nov 9, 2011 12:43 PM Flag

    ZYGNA IPO

    Expected around Thanksgiving, rev 1 bill, valuation 11 billion 11 times sales. VS ERTS 3.8 billion in rev 7.81B mrkt cap. P/S-> ~2. Plus Zygna lives under the FB umbrella, if they move the umbrella no doubt Xygna will get wet.

    I do not see how that nutty evaulation is not going to have a positive effect on ERTS stock. $30 here we come!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Everyone here but you seems to know that if SWTOR is very successful it won't really add that much to the bottom line of ERTS's yearly revenue. It will be nice if it is a hit but it won't double the stock if that is what you are thinking. You don't seem to calculate the economic climate into your investing, that is if you invest at all. Take a look at AP, Reuters, Bloomberg instead of VGChartz as your only news source.

    • So if the market continues to crash for the next two days, taking down ERTS from 23.12 now to 20.50 or 21.95 do you expect a Zynga IPO to add 40% to 50% taking this stock to $30? That would be pretty remarkable, a 50% increase in PPS in a couple of weeks based off a junior competitor's 5-7% share IPO. They wll keep pushing the IPO until the market stabilizes. That could be a long time, may be even a very long time.

      Say thing market pushes it up a remarkable 15% one day one followed by a remarkable 10% increase on the second day, after which people would take profits, you are looking at a PPS of around 24.50. I believe I heard it was a great buy at $25.50 at one point.

    • If EA has a $6.5bn enterprise valuation and Zynga is being brought to market at $10bn enterprise value, there is clearly reason to believe it will help valuation of ERTS common equity over next few months. You'd think ERTS could rerate to $8 - $10bn enterprise value quite easily... While ERTS profitability and margin structure is still in recovery mode, the quality/depth of their intellectual property, FIFA & NFL & NHL licenses, Star Wars license etc are quite valuable as well. I'd say in a takeout ERTS would sell for a slight premium to ATVI's current valuation in fact. ERTS is going to outpace growth of ATVI over next 3-5 years without a doubt.

    • EA is going to do $4.2bn in revenue (March 2012) and $4.5 - $4.7bn in FY2013.

      so in reality the valuation is a little under 1.8x EV/Revenue

 
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