Electronic Arts (EA) Dips More Than Broader Markets: What You Should Know

Electronic Arts (EA) closed the most recent trading day at $125, moving -1.08% from the previous trading session. This move lagged the S&P 500's daily loss of 0.72%.

Heading into today, shares of the video game maker had lost 9.27% over the past month, lagging the Consumer Discretionary sector's loss of 5.68% and the S&P 500's gain of 0.11% in that time.

Investors will be hoping for strength from Electronic Arts as it approaches its next earnings release. In that report, analysts expect Electronic Arts to post earnings of $3.20 per share. This would mark year-over-year growth of 3.56%. Meanwhile, our latest consensus estimate is calling for revenue of $2.66 billion, up 11.02% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.05 per share and revenue of $7.67 billion. These totals would mark changes of +22.4% and +23.95%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Electronic Arts. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Electronic Arts is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note Electronic Arts's current valuation metrics, including its Forward P/E ratio of 17.93. Its industry sports an average Forward P/E of 17.93, so we one might conclude that Electronic Arts is trading at a no noticeable deviation comparatively.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 69, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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Electronic Arts Inc. (NASDAQ:EA): Free Stock Analysis Report

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