EA
Electronic Arts Inc.$201.06
Sell
Target $175.55
Report: Mar 07, 2026Technology • Electronic Gaming & Multimedia • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$201.06-12.7%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$175.55
(13% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$204.89
52 Week Low$131.15
Avg. 3 Month Volume2.55M
Efficiency
LTM Gross Margin78.3%
LTM EBITDA Margin18.2%
LTM EBIT Margin13.8%
LTM Operating Margin13.6%
LTM ROA5.5%
LTM ROE11.0%
LTM ROIC32.5%
LTM ROCE11.1%
Capital Structure
Market Cap (MM)$51.0B
Enterprise Value (MM)$50.1B
Shares Outstanding250.00M
Total Debt (MM)$1.89B
Cash & Equivalents (MM)$2.78B
LTM Net Debt (MM)$-899.00M
LTM Net Debt/EBITDA-0.7x
Growth
TTM Rev. Growth-0.6%
Last 3-Yr Rev. CAGR-0.3%
Last 3-Yr EBITDA CAGR-12.9%
Last 3-Yr EPS CAGR-10.1%
Valuation
Street Target Price$210.00
LTM EV/Revenue6.9x
LTM EV/Gross Profit8.8x
LTM EV/EBIT49.7x
LTM EV/EBITDA37.8x
LTM P/E75.0x
LTM EV/FCF21.8x
LTM P/FCF22.2x
LTM P/TB6.6x
LTM P/B8.3x
Dividend Yield0.4%
Payout Ratio28.1%
Executive SummarySituation: Current price is $201.06 versus fair value $175.55 (-12.7% expected return), and valuation confidence is stable. Debate: Bull case depends on Battlefield 6 Reveal and Launch. Bear case centers on M&A Completion Risk. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The 210.00 USD per share buyout offer from the Saudi PIF provides a hard valuation floor and a 4.5% immediate upside. Furthermore, the American football ecosystem (Madden and College Football) remains a powerhouse, generating over 1 billion USD in net bookings with 70% YoY growth.
Bear Case
Fundamental overvaluation is extreme, with a P/E ratio of 73.8x compared to an industry average of 33x. Insider alignment is non-existent, as evidenced by 93 discretionary sales totaling 44.3 million USD and zero purchases by management in the last 12 months.
Key Catalysts
Near-Term (0-6 months)Impact: High
Battlefield 6 Reveal and Launch. Battlefield represents the company's largest investment ever; a successful launch is required to offset the...
Mid-Term (6-18 months)Impact: Critical
Regulatory Decision on PIF Acquisition. A definitive ruling from U.S. or European regulators regarding the Saudi-led take-private deal will...
Long-Term (18+ months)Impact: Moderate
EA is relevant at this moment because it is trading near its 52-week high of 204.89 USD despite a deteriorating fundamental profile, creatin...
Primary Risks
Concern: High
M&A Completion Risk. If the PIF acquisition completes at 210.00 USD, any sell or short position will realize a loss of approximately 4.5% pl...
Concern: Medium
Moat Erosion in Live Services. A permanent shift in player preferences away from microtransaction-heavy sports titles would impair the compa...
Concern: Medium
The governance outcome tree presents three paths: 1. **Status Quo**: The PIF deal closes at 210.00 USD, providing a 4.5% exit. 2. **Compromi...
Recent Activity
2025-07-30SEC Filing (8-K)
+5.73%Electronic Arts reports Q1 FY26 results with net bookings of $1.298 billion exceeding guidance.
2025-02-05SEC Filing (8-K)
+7.60%Electronic Arts reports Q3 FY25 results and announces $1 billion accelerated stock repurchase program.
2025-01-23SEC Filing (8-K)
-16.70%Electronic Arts pre-announces preliminary Q3 FY25 results with revenue and earnings decline.
2023-08-02SEC Filing (8-K)
-7.21%Electronic Arts reports record Q1 FY24 results driven by FIFA and Star Wars Jedi: Survivor.
2023-07-11Press Release
+5.20%Pepsico® Forges Global Partnership With Ea Sports Fc™ To Help Deliver Fan-First Future Of Football
Valuation Table
9.8/10Decision Grade