EA - Embedded Expectations Analysis - 2020 04 07
ï€ Electronic Arts Inc. (EA:USA) currently trades below recent averages relative toUAFRS-based (Uniform) earnings, with a 18.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their growth, IP portfolio, and mobile market opportunities
ï€ Specifically, management is confident that they expect net revenue of $1.325bn in Q4, they are focused on growing both the top and bottom-line, and they intend to leverage a growing base of next-gen consoles with the new Battlefield. Moreover, they are confident that they launched 8 major games in 2019, they are growing their IP portfolio with great new games, and their strength in live services will position them well in additional growth areas. They are also confident about the quality of their European studios and that average selling prices were strong across their portfolio. Finally, they are confident about the opportunities in the mobile market and that digital net bookings were up 20% year-over-year
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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