EA - Embedded Expectations Analysis - 2018 10 30
Electronic Arts Inc. (EA:USA) currently trades near recent averages relative toUAFRS-based (Uniform) Earnings, with a 20.7x Uniform P/E. At these levels, the market has relatively bullish expectations for the firm, and management is confident about their Origin and Access platforms, more gaming interest due to Fortnite, and their conservative guidance for their titles
Specifically, management is confident that the greatest disruption of entertainment media in the last five years is the combination of streaming plus subscription. Additionally, they are confident that they had lower than usual monetization of their FIFA Ultimate Team during the World Cup to drive player growth, and that they have produced additional Sims content based on feedback from the community of Sims fans. Moreover, they are confident that more people have been brought into playing games due to the Fortnite craze and that more people will play their games in the future as a result. Furthermore, they are confident that adding frontline titles to their Origin and Access platforms will help drive new users into the system, and that they have not had to change their guidance for their titles
Electronic Arts develops, markets, publishes and distributes games, content and services that can be played and watched on a variety of platforms, including game consoles, personal computers, and mobile phones. The company markets and sells its games and services through digital distribution channels and through retail channels. Digitally, the company's console games and services can be purchased through third-party storefronts. In its games and services, the company utilizes brands that it either wholly own or license from others. The company develops and publishes games and services across genres. Within and alongside its games, the company provides live services, including in-game purchases, downloadable content, and esports.
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