In the latest trading session, Electronic Arts (EA) closed at $106.80, marking a +0.45% move from the previous day. This change lagged the S&P 500's 3.41% gain on the day. At the same time, the Dow added 3.44%, and the tech-heavy Nasdaq gained 2.58%.
Heading into today, shares of the video game maker had gained 2.84% over the past month, outpacing the Consumer Discretionary sector's loss of 14.3% and the S&P 500's loss of 10.46% in that time.
EA will be looking to display strength as it nears its next earnings release, which is expected to be May 5, 2020. On that day, EA is projected to report earnings of $0.98 per share, which would represent a year-over-year decline of 30.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.17 billion, down 13.98% from the year-ago period.
Investors should also note any recent changes to analyst estimates for EA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.35% lower within the past month. EA is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note EA's current valuation metrics, including its Forward P/E ratio of 21.54. This represents a discount compared to its industry's average Forward P/E of 24.14.
It is also worth noting that EA currently has a PEG ratio of 2.63. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Toys - Games - Hobbies was holding an average PEG ratio of 1.98 at yesterday's closing price.
The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Electronic Arts Inc. (EA) : Free Stock Analysis Report
To read this article on Zacks.com click here.