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Electronic Arts EA shares have gained 21.7% year to date, outperforming the broader Zacks Consumer Discretionary sector’s return of 10.9%.
EA shares have also outperformed the Zacks Gaming industry’s growth of 20.7% and its peers TakeTwo Interactive Software TTWO, Roblox RBLX and Nintendo NTDOY. Over the same time frame, shares of TTWO, RBLX and NTDOY have gained 15.6%, 14.2% and 1.7%, respectively.
EA shares’ outperformance can be attributed to strong top-line growth, driven by increased demand for live services and full-game revenues. During the second quarter of fiscal 2025, live services and other revenues increased 1.2% year over year to $1.3 billion, whereas full-game download revenues increased 37% year over year to $475 million.
However, sluggish growth in packaged goods revenues and intensifying competition in the video games industry are concerns for Electronic Arts’ prospects.
Electronic Arts Inc. Price and Consensus
Electronic Arts Inc. price-consensus-chart | Electronic Arts Inc. Quote
EA’s Portfolio Enhancements Aid Prospects
Electronic Arts recently announced the launch of Strand Hair Technology, driven by Frostbite and BioWare, in Dragon Age: The Veilguard. EA’s latest technology aids in visual fidelity and enhances the realism of characters, adding 50K individual strands for each character for more than 100 hairstyles.
Electronic Arts launched Cranium Technology in EA SPORTS FC 25 to enhance the character crafting experience for users.
EA’s Cranium Technology not only aids in giving users greater control over multiple aspects of a character’s head model but also enables the animated character to move naturally.
Electronic Arts spearheaded in patching technology by launching In Place Updates (IPU) and is integrated into most EA games.
EA’s strong pipeline that includes releases like MySims: Cozy Bundle and Plants Vs. Zombies 3 bodes well for investors.
EA’s research and development in upcoming product enhancement in Battlefield and skate aims to drive customer engagement and momentum by enhancing user satisfaction.
Electronic Art’s strategic approach to enhance engagement and monetization by increasing user retention bodes well for investors.
EA’s Fiscal 2025 Guidance
For third-quarter fiscal 2025, EA expects GAAP revenues between $1.875 billion and $2.025 billion and earnings per share in the range of 85 cents to $1.02. Net bookings are expected between $2.4 billion and $2.55 billion.
For fiscal 2025, EA expects revenues in the range of $7.4-$7.7 billion and earnings in the band of $3.34-$4 per share.
The company expects net bookings for fiscal 2025 between $7.5 billion and $7.8 billion.
Operating cash flow is estimated in the band of $2.075-$2.275 billion.