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Electronic Arts (EA) Hits 52-Week High, Fundamentals Strong
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Share price of Electronic Arts Inc. (EA - Free Report) rallied to a new 52-week high of $90.81, eventually closing a tad lower at $90.73 on Mar 13. This represents a one-year return of approximately 38.6%, better than the Zacks Toys - Games – Hobbies industry’s return of 31% over the same period.
Currently, Electronic Arts holds a Zacks Rank #2 (Buy). Notably, the stock has a market cap of $27.97 billion.
Key Factors
One of the leading video game publishers, Electronic Arts has been a consistent performer in recent times courtesy the performance of its popular franchises. The biggest franchises of the company include EA Sports, Battlefield, Titanfall and Star Wars, which demonstrate the company’s growiing clout in the market. Notably, Electronic Arts has outperformed the Zacks Consensus Estimate by an average of 32.94% in the last four quarters.
EA is also benefiting from the shift from physical to digital versions of video games. This shift is expected to drive the growth of the company in fiscal 2017 and beyond backed by a strong mobile business. Consumer spending on smartphones and portable devices like iPad has multiplied several times compared to PC and gaming consoles. Digital videogames are also cost effective for the company with low packaging cost.
The growth of Electronics Arts was primarily driven by a series of new mobile game releases like Star Wars: Galaxy of Heroes and Madden NFL Mobile in fiscal 2016. This trend is expected to drive the market in fiscal 2017 as well. Management has scheduled several releases for the 2017 holiday season including the sequel of Star Wars Battlefront.
Additionally, EA entered the Virtual Reality (VR) market with the development of Need for Speed No Limits VR on Google’s Daydream.
Estimate Revisions
The Zacks Consensus Estimate for fiscal 2017 remained unchanged at $3.31. However, for fiscal 2018, estimates have fallen 4.3% over the same time frame to $3.80.
Key Sector Picks
Stocks worth considering in the broader technology sector include Applied Optoelectronics, Inc. (AAOI - Free Report) , Activision Blizzard, Inc. and Hasbro, Inc. (HAS - Free Report) . While Applied Optoelectronics sports a Zacks Rank #1 (Strong Buy), Activision and Hasbro have a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Electronic Arts (EA) Hits 52-Week High, Fundamentals Strong
Share price of Electronic Arts Inc. (EA - Free Report) rallied to a new 52-week high of $90.81, eventually closing a tad lower at $90.73 on Mar 13. This represents a one-year return of approximately 38.6%, better than the Zacks Toys - Games – Hobbies industry’s return of 31% over the same period.
Currently, Electronic Arts holds a Zacks Rank #2 (Buy). Notably, the stock has a market cap of $27.97 billion.
Key Factors
One of the leading video game publishers, Electronic Arts has been a consistent performer in recent times courtesy the performance of its popular franchises. The biggest franchises of the company include EA Sports, Battlefield, Titanfall and Star Wars, which demonstrate the company’s growiing clout in the market. Notably, Electronic Arts has outperformed the Zacks Consensus Estimate by an average of 32.94% in the last four quarters.
EA is also benefiting from the shift from physical to digital versions of video games. This shift is expected to drive the growth of the company in fiscal 2017 and beyond backed by a strong mobile business. Consumer spending on smartphones and portable devices like iPad has multiplied several times compared to PC and gaming consoles. Digital videogames are also cost effective for the company with low packaging cost.
The growth of Electronics Arts was primarily driven by a series of new mobile game releases like Star Wars: Galaxy of Heroes and Madden NFL Mobile in fiscal 2016. This trend is expected to drive the market in fiscal 2017 as well. Management has scheduled several releases for the 2017 holiday season including the sequel of Star Wars Battlefront.
Additionally, EA entered the Virtual Reality (VR) market with the development of Need for Speed No Limits VR on Google’s Daydream.
Estimate Revisions
The Zacks Consensus Estimate for fiscal 2017 remained unchanged at $3.31. However, for fiscal 2018, estimates have fallen 4.3% over the same time frame to $3.80.
Key Sector Picks
Stocks worth considering in the broader technology sector include Applied Optoelectronics, Inc. (AAOI - Free Report) , Activision Blizzard, Inc. and Hasbro, Inc. (HAS - Free Report) . While Applied Optoelectronics sports a Zacks Rank #1 (Strong Buy), Activision and Hasbro have a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>