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Electronic Arts (EA) Gains But Lags Market: What You Should Know

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In the latest trading session, Electronic Arts (EA - Free Report) closed at $128.90, marking a +1.62% move from the previous day. This change lagged the S&P 500's 1.64% gain on the day. Elsewhere, the Dow gained 1.08%, while the tech-heavy Nasdaq added 0.45%.

Prior to today's trading, shares of the video game maker had lost 9.11% over the past month. This has lagged the Consumer Discretionary sector's loss of 9.06% and the S&P 500's loss of 0.83% in that time.

Electronic Arts will be looking to display strength as it nears its next earnings release. 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.

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 should also note any recent changes to analyst estimates for Electronic Arts. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 a Zacks Rank #2 (Buy).

Looking at its valuation, Electronic Arts is holding a Forward P/E ratio of 18. This valuation marks a no noticeable deviation compared to its industry's average Forward P/E of 18.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 65, 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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