Electronic Arts (NASDAQ: EA) is scheduled to report its FYQ2 2023 financial results on Tuesday, Nov 1. We expect the company to post revenue and earnings in line with consensus estimates. The company should benefit from FIFA 23 and Madden 23 being released during the quarter. The company is likely to see net earnings grow during the quarter. Not only do we expect Electronic Arts to do well during the quarter, but we also find its stock has plenty of room for growth, as discussed below. Our interactive dashboard review Electronic Income Check it has more details.
(1) Amounts expected to be consistent with the agreement’s estimates
- Trefis estimates Electronic Arts’ Q2 2023 revenue (book total) to be $1.8 billion, based on the consensus estimate as well as the company’s guidance.
- The company should benefit from its live services, especially for the FIFA franchise.
- Looking back at Q1, the company reported revenue of $1.3 billion (book total), down 3% yoy, mainly due to changes in deferred revenue.
- Looking at revenue by platform, mobile revenue was up 48%, thanks to the company’s acquisition of Glu last year.
- Our dashboard is open Electronic Arts Funds provides more information about the company’s shares.
(2) EPS may be consistent with consensus estimates
- Electronic Arts’ Q2 2023 adjusted earnings per share is expected to be $1.38 per Trefis analysis, in line with the consensus estimate of $1.37.
- The company’s adjusted revenue of $131 million in fiscal Q1 2023 represented a 43% decrease from its figure of $230 million in the year-ago quarter.
- The company wants to lower its advertising costs to levels before Apple makes changes to its ad tracking policies. This should help the company’s operations in the future.
- The company saw net growth expand in Q1, led by a higher revenue mix, a trend that is expected to continue in the near term.
- For full fiscal 2023, we forecast EPS to be higher at $7.19, compared to $7.02 in fiscal 2022.
(3) EA stock looks like it has enough room to grow
- We guess Electronic Arts Standard to close at $152 per share, which is 19% above its current market price of $128.
- This represents a forward P/E of 21x for the company based on our EPS forecast of $7.19 for fiscal 2023.
- At its current level, EA stock trades at 18x adjusted earnings, compared to the last three-year average of 22x.
- If the company reports higher Q2 results and provides a better outlook than street estimates, it is likely that the P/E ratio will be revised higher, which will result in is up for EA stock.
Although EA stock looks like it has a lot of room to grow, it’s good to see how Electronic Arts’ Peers charge on key metrics. You will find other useful comparisons for companies across industries at Peer Comparison.
Additionally, the Covid-19 crisis as well as the recent market volatility has created a lot of price volatility that can provide great business opportunities. For example, you’d be surprised how much stock prices fluctuate Teradata vs. Crane.
With inflation rising and the Fed raising interest rates, among other factors, Electronic Arts’ stock is down 3% this year. Can it go any lower? See how much Electronic Arts stock could fall by comparing its declines to past market crashes. Here is a summary of the stock’s performance in past market risks.
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