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Electronic Arts (EA) Dips More Than Broader Markets: What You Should Know

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Electronic Arts (EA - Free Report) closed at $95.67 in the latest trading session, marking a -0.98% move from the prior day. This move lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow lost 0.26%, while the tech-heavy Nasdaq lost 1.13%.

Coming into today, shares of the video game maker had gained 3.86% in the past month. In that same time, the Consumer Discretionary sector gained 1.51%, while the S&P 500 gained 3.59%.

Wall Street will be looking for positivity from EA as it approaches its next earnings report date. On that day, EA is projected to report earnings of $0.85 per share, which would represent a year-over-year decline of 13.27%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.24 billion, up 1.78% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.62 per share and revenue of $5.17 billion, which would represent changes of -1.49% and +3.62%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for EA. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. EA is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that EA has a Forward P/E ratio of 20.92 right now. This valuation marks a discount compared to its industry's average Forward P/E of 23.48.

Meanwhile, EA's PEG ratio is currently 3.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Toys - Games - Hobbies stocks are, on average, holding a PEG ratio of 2.31 based on yesterday's closing prices.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% 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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