Zacks Investment Research Lowers Electronic Arts Inc. (EA) to Sell

Zacks Investment Research lowered shares of Electronic Arts Inc. (NASDAQ:EA) from a hold rating to a sell rating in a research report report published on Wednesday, May 10th.

According to Zacks, “Electronic Arts reported fourth quarter fiscal 2017 results wherein earnings came in much lower than prior year quarter whereas revenues increased year over year. Continued increases in digital revenues and strength in mobile games (Star Wars: Galaxy of Heroes) and FIFA 17 as well as Battlefield 1 were the driving factors. Apart from growing digital business, cost optimization initiatives will be beneficial going forward. However, the video game industry is hit driven. Though EA has a powerful line up of games that can be repeatedly upgraded, there is no assurance that a particular game will be a hit. We believe the underperformance of any title would affect results. Even stiff competition is a big concern. Though shares have outperformed the Zacks industry over the past one year, the stock trades at high P/B multiple, at current market price, which restricts its upside potential. “

A number of other analysts have also weighed in on EA. Vetr lowered shares of Electronic Arts from a buy rating to a strong sell rating and set a $67.56 price objective for the company. in a research note on Wednesday, January 11th. Mizuho reissued an outperform rating and set a $92.00 price target on shares of Electronic Arts in a research report on Monday, January 30th. Cowen and Company reissued a market perform rating on shares of Electronic Arts in a research report on Tuesday, January 31st. Jefferies Group LLC increased their price target on shares of Electronic Arts from $105.00 to $110.00 and gave the company a buy rating in a research report on Wednesday, February 1st. Finally, Macquarie reissued an outperform rating and set a $88.00 price target on shares of Electronic Arts in a research report on Wednesday, February 1st. One research analyst has rated the stock with a sell rating, six have assigned a hold rating and sixteen have issued a buy rating to the company’s stock. The company currently has an average rating of Buy and a consensus target price of $102.31.

Electronic Arts (NASDAQ:EA) traded up 0.66% during trading on Wednesday, reaching $107.64. 2,282,384 shares of the company traded hands. Electronic Arts has a 12-month low of $71.01 and a 12-month high of $112.16. The firm has a market capitalization of $33.15 billion, a price-to-earnings ratio of 34.95 and a beta of 0.65. The firm’s 50 day moving average price is $95.55 and its 200 day moving average price is $85.91.

Electronic Arts (NASDAQ:EA) last released its quarterly earnings data on Tuesday, May 9th. The game software company reported $0.58 earnings per share for the quarter, missing the Zacks’ consensus estimate of $0.61 by $0.03. Electronic Arts had a return on equity of 27.22% and a net margin of 28.10%. The business had revenue of $1.53 billion during the quarter, compared to analysts’ expectations of $1.09 billion. During the same period last year, the company earned $0.50 earnings per share. The firm’s revenue was up 16.7% compared to the same quarter last year. Equities research analysts expect that Electronic Arts will post $4.22 earnings per share for the current year.

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In other news, CEO Andrew Wilson sold 8,000 shares of Electronic Arts stock in a transaction on Wednesday, March 1st. The stock was sold at an average price of $86.96, for a total transaction of $695,680.00. The sale was disclosed in a filing with the SEC, which is available at this link. Also, SVP Jacob J. Schatz sold 2,200 shares of Electronic Arts stock in a transaction on Tuesday, February 21st. The shares were sold at an average price of $87.40, for a total value of $192,280.00. The disclosure for this sale can be found here. Insiders have sold a total of 272,023 shares of company stock worth $26,220,086 in the last ninety days. 3.46% of the stock is owned by company insiders.

Hedge funds have recently added to or reduced their stakes in the stock. Guardian Life Insurance Co. of America boosted its stake in Electronic Arts by 2.9% in the first quarter. Guardian Life Insurance Co. of America now owns 1,190 shares of the game software company’s stock worth $107,000 after buying an additional 34 shares during the last quarter. Bessemer Group Inc. boosted its stake in shares of Electronic Arts by 3,410.0% in the fourth quarter. Bessemer Group Inc. now owns 1,404 shares of the game software company’s stock worth $111,000 after buying an additional 1,364 shares in the last quarter. Invictus RG boosted its stake in shares of Electronic Arts by 722.0% in the first quarter. Invictus RG now owns 1,307 shares of the game software company’s stock worth $117,000 after buying an additional 1,148 shares in the last quarter. Harvest Fund Management Co. Ltd bought a new stake in shares of Electronic Arts during the fourth quarter worth $118,000. Finally, Mitsubishi UFJ Securities Holdings Co. Ltd. boosted its stake in shares of Electronic Arts by 270.5% in the third quarter. Mitsubishi UFJ Securities Holdings Co. Ltd. now owns 1,630 shares of the game software company’s stock worth $139,000 after buying an additional 1,190 shares in the last quarter.

About Electronic Arts

Electronic Arts Inc develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed.

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