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Electronic Arts Inc. (EA)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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131.87+4.48 (+3.52%)
As of 11:58AM EDT. Market open.
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  • T
    Tony
    What effect will it have on EA's pps in losing it's FIFA license??
    Bearish
  • I
    IRIZARRY
    thanks Apex Legends.
    Bullish
  • S
    Steve
    Recession is a very good news for $NFLX $EA and terrible for $M $CAKE
  • P
    Paul
    Anyone else see this going to $80?
  • M
    Michelle
    Is this stock recession proof? Get ready for $93 kids.
  • K
    King
    Wish Msft buy EA? You could still buy Atvi at 21+% discount to Msft's offer of $95.
  • Y
    Yahoo Finance Insights
    Electronic Arts reached a 52 Week low at 113.21
  • Y
    Yahoo Finance Insights
    Electronic Arts reached a 52 Week low at 116.40
  • o
    otter
    TTWO and ATVI have p/e of about 23.. EA is at 50?? Get ready for the FALL!!
    Bearish
  • W
    Winorlose
    Worse buy
  • W
    Will
    As a long time gamer, this company has been one of the worst company?s in recent years for gamin. #$%$ EA and there unfinished / pay to win games
  • g
    guy
    As usual, my predictions for ER today:

    1. Revenue will show a healthy beat, driven by Covid-19 stay at home and based on live services, mainly FIFA, Madden, The Sims and Apex Legends, and further boosted by a weakening US dollar. I also expect that subscription services saw a nice uptick and perhaps EA will share some figures. Full game sales will probably have contributed only modestly to a revenue beat, since no new games were released this quarter and any lingering sales of Fallen Order, NFS Heat, FIFA 20 and Madden 20 were discounted. Would be interesting, though, to see if EA will share sales figures from their renewed partnership with steam.

    2. EPS will show a modest beat. Typically EPS is where EA was beating estimates hard, sometimes by orders of magnitude, however, they recently suspended their stock buyback programs and as long as these remain on-hold, major EPS beats will be harder to pull-off.

    3. Apropos stock buybacks. This will be one of the major announcements to look for. If EA renews its programs, it would go a long way in showing confidence in their continued massive free cashflow of recent years, despite Covid-19. If they opt out, or postpone their decision, that could be a yellow flag. Another option is for them to replace stock buybacks with dividends, but as this would be a major policy change, it’s highly unlikely.

    4. Mobile will finally get some attention this ER. For years, mobile has been the black sheep at EA, barely mentioned nor discussed and certainly nothing be proud of, with stagnating revenues and barely any new content. However, with Apex Mobile all but confirmed, and a newly-hired mobile division SVP, it seems EA may finally be getting serious about its mobile business. Very interesting to hear of any future plans, especially in acquisitions.

    5. New title announcements? Obviously, EA revealed quite a few titles at EA Play, and then followed-up with UFC 4, still I have a feeling they’re not done and there may be additional reveals coming this fiscal, though perhaps not this ER.

    6. Future guidance. As usual, this is what the post-ER stock price action will reflect. While a Q1 beat could drive a nice AH rally, it could soon flatten-out or worse, if future guidance fails to excite. EA rarely raises full-year guidance this early in the year, but they’re very likely to now, especially since their CFO literally spelled this out during EA Play. But, by how much? With the stock hanging close to its 52 week high and only 10% from its all-time high, it may take more than a slight guidance increase to reach new highs. I’d like to see revenue raised by at least 2%-3% or around $100M-$200M, but knowing how conservative EA management is, I think it’s more likely they’ll raise by 1% or less. If that happens, a post-ER rally may be tricky to sustain.
  • M
    Matthew
    This company is garbage compared to what it used to be in 2010-2013
  • A
    Andre
    what's often missed is that gaming stocks have been hammered down by 30-50% while market is at all time highs.

    Financially nothing has really changed. Last earnings were heavily influenced by RDR2 for all gaming stocks. While $EA and $ATVI are adapting to the fast changing markets $TTWO builds its foundation on quality and doesnt seem to move on from there.

    I do expect next earnings to be solid:
    $EA: Fifa did very well in the quarter. Anthem was ok maybe a little lower than expected, Apex doing good also a lot of people just tend to measure the success on Twitch viewers which is absolutely wrong! Battlefield 5 BR gives another little push upside to compensate Anthem revenue streams. As an outlook EA has huge potentials to grow: E-Sports (new studio built), Apex future seasons, BF5 Firestorm F2P, EA Access on PS4, New StarWars game by Respawn
  • N
    Nino
    Per the Marketwatch article today: "We are watching Steam user reviews and noticing how they are more a place to complain as opposed to review games,” Uerkwitz said. “‘Battlefield 2042’ has ranked near the bottom based on reviews, yet currently sits at the top on the bestseller list.” At the time of this post, BF2042 is the #3 on the best sellers list, despite the negative reviews. Since this is about profitable companies, I'm still in the game with EA.
  • T
    The_Kid
    Don't sleep on EA... Battlefield coming out this fall, and Apex is gaining a lot of traction lately as well with Call of Duty (Warzone) beginning to fall off in popularity. Check out the increases in Twitch streams for Apex in the past two weeks. All the big name streamers are buying cosmetic packs and spending money in front of sometimes hundreds of thousands of viewers.

    Do not sleep on EA. I've got December calls I expect to be deep ITM by earnings in November.
  • P
    Paul
    Everyone should go to the EA website (linked in their press release announcing the date of their earnings report) and read the report. The company gives a table labeled "Results", which lists guidance revenues and earnings, and shows the actual results, beating on both revenues and EPS earnings easily. Some of the news reporting services have this information all mucked up, including Yahoo Finance site.
  • A
    Andre
    Finally I am convinced EA will have a huge FY2020.

    Star Wars Jedi Fallen Order Trailer has 2,3M views in 12 hours
    https://www.youtube.com/watch?v=0GLbwkfhYZk&t=3s

    and is already #1 and #2 in Amazon preorder charts
    https://www.amazon.com/gp/bestsellers/videogames/6427831011/ref=pd_zg_hrsr_videogames_1_1_last

    Release 15th of November. Looks like best selling title of 2019 and we havent even seen what else is in their pipeline.
    Dont see a reason to go short in EA anymore. Like all gaming stocks it should be +20% at least
  • g
    guy
    Well, now that the initial reaction is behind us, and regardless of how the stock price evolves in the coming days, there are some more material topics for long-term and growth minded investors. Although guidance was robust, there are several weaknesses and risks that EA did not seriously address on the earnings call:

    1. Mobile continues to decline and there were no new games announced. Here, I don't really see how EA can patch this revenue hole on its own without some acquisitions. EA does have deep pockets and can certainly afford to make some meaningful investments, problem is, the mobile market is so fragmented, and having missed the chance to pick-up behemoths King and Supercell, I can't think of a specific acquisition that can 100% solve EA's mobile woes. Although Zynga and Glu are potential candidates (Both run by former EA execs, btw), both have patchy histories, and with EA’s own patchy history of acquisitions, I doubt they’ll rush into these particular transactions. This probably means multiple acquisitions of smaller developers which will take years to complete and integrate. Another possibility is acquisitions in Asia, although this doesn't seem to be EA's modus operandi.

    2. Loot Box regulation is coming and maybe sooner than we think. We’ll probably see meaningful developments in this direction already this fiscal. EA does not seem to have any strategy to address that. They could transition to selling cosmetics and game upgrades a-la-carte, but this would require investments in the backend and more importantly, in the games' ecosystems, that may take months, or longer, to get right. In the meantime, revenue will suffer.

    3. The transition to digital distribution, with its higher profit margins, has been one of the main growth drivers for EA over the past 5 years with 7%-8% percentage-point increases YoY , but now it's starting to taper off, simply because it’s running out of runway. Digital is already at 75% of total revenue and forecast to go to 77.5% in FY20. Can EA find a way to nudge this higher? Possible solutions are investing more in MTX and downloadable content; more games in the free to play model like Apex Legends, stronger mobile presence, and completely halting the production and sale of physical retail copies. That last one would be a doomsday scenario and I don't imagine we'll see that for at least 5 years, if that.

    Any thoughts?
  • g
    guy
    So, what are you thinking following EA Play? I've got mixed feelings.

    1. Fallen Order looked good visually, but at least in the parts they showed, it seemed very linear and action oriented and not what I was hoping to see, which was Tomb Raider or Uncharted with light sabers. This could work both for and against sales. Personally, I can't say it felt like a must play.

    2. FIFA and Madden continue to evolve with new game modes and features. Should definitely make the fans happy. Sales should be strong.

    3. The Sims Island Living looks cool and very photogenic. Who wouldn't want to take their Sims on a beach holiday? Should boost The Sims presence this year, which according to the last earnings call, is already in a good place.

    4. Battlefield and Apex. On the one hand EA is continuing to evolve these titles, which is good, on the other hand, there was nothing that was wow. Even the new Legend was presented with a boring animation that revealed nothing of what the character can do. Bottom line, these additions should keep these titles in play, but I doubt there will be any breakthrough in terms of earnings.

    5. Anthem and NFS were conspicuously absent. Not a good sign.

    6. No new game announcements or new platform launches. Nothing on mobile. Disappointing.

    Overall, the show was poorly produced, many of the hosts were annoying and most interviewees lacked charisma and enthusiasm. This is really not how you generate excitement with the fans.

    I still think EA should see a nice positive single digit bump next week, but will not break resistance. For more dramatic gains, I think we may need to wait for the next earnings or for a strong overall stock market rally to provide tailwinds.
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