Electronic Arts (EA) closed at $132.17 in the latest trading session, marking a +1.73% move from the prior day. This move lagged the S&P 500's daily gain of 1.78%. Elsewhere, the Dow gained 1.61%, while the tech-heavy Nasdaq added 0.95%.
Prior to today's trading, shares of the video game maker had gained 2.88% over the past month. This has outpaced the Consumer Discretionary sector's loss of 9.2% and the S&P 500's loss of 2.63% in that time.
Wall Street will be looking for positivity from Electronic Arts as it approaches its next earnings report date. The company is expected to report EPS of $3.20, up 3.56% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.66 billion, up 11.02% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.05 per share and revenue of $7.67 billion, which would represent changes of +22.4% and +23.95%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Electronic Arts. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. Electronic Arts is currently sporting a Zacks Rank of #2 (Buy).
Investors should also note Electronic Arts's current valuation metrics, including its Forward P/E ratio of 18.43. For comparison, its industry has an average Forward P/E of 17.99, which means Electronic Arts is trading at a premium to the group.
The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 66, putting it in the top 26% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Electronic Arts Inc. (NASDAQ:EA): Free Stock Analysis Report
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