Oppenheimer has raised its price target for Electronic Arts (EA, Financial) from $140 to $170, maintaining an Outperform rating on the stock. The investment firm anticipates that the introduction of a Premium Pass in EA Sports FC will drive unforeseen multi-year growth in bookings. Known traditionally as a battle pass, this monetization tool is a critical component in many high-profile live services games.
Oppenheimer projects that the EA Sports FC Premium Pass will contribute to incremental bookings growth, potentially reaching mid-to-high single digits once it is fully rolled out. This development suggests an optimistic outlook for the company's financial performance, reinforcing investor confidence in EA's future revenue streams.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 25 analysts, the average target price for Electronic Arts Inc (EA, Financial) is $148.70 with a high estimate of $179.00 and a low estimate of $126.00. The average target implies an upside of 1.72% from the current price of $146.19. More detailed estimate data can be found on the Electronic Arts Inc (EA) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, Electronic Arts Inc's (EA, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Electronic Arts Inc (EA, Financial) in one year is $143.60, suggesting a downside of 1.77% from the current price of $146.19. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Electronic Arts Inc (EA) Summary page.
EA Key Business Developments
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EA Sports FC had a strong start with high-quality launch, winning Sports Game of the Year, and increased player monetization year-over-year.
- The Team of the Year event reactivated over 2 million Ultimate Team players, with record weekly active users and positive trends across all acquisition cohorts.
- EA's American football ecosystem saw double-digit growth in players year-over-year, with Ultimate Team engagement also increasing.
- The acquisition of TRACAB technologies is expected to enhance EA Sports' capabilities in delivering more authentic and immersive gameplay.
- EA's strategic initiatives include a $1 billion accelerated stock repurchase, demonstrating confidence in long-term growth and commitment to returning capital to stockholders.
Negative Points
- Q3 financial performance was below expectations, with net bookings down 6% year-over-year.
- Dragon Age: The Veilguard underperformed due to competitive dynamics in the single-player RPG market.
- EA Sports FC experienced a decline in momentum due to soft top-of-funnel acquisition and lapsed engagement later in the quarter.
- Apex Legends' net bookings were down year-over-year, with the franchise not meeting desired growth trajectories.
- Guidance for FY25 net bookings was revised down, with expectations of a low double-digit decline in global football franchise net bookings for Q4.
