Electronic Arts Inc. (EA) is a leading global developer and distributor of electronic games played on a wide range of platforms. This Redwood City, California-based company boasts of the world’s bestselling games. With a growing interest in games and the penetration of gadgets to emerging markets, Electronic Arts Inc. is expected to experience substantial growth in its annual revenue in the subsequent years.
Even though Electronic Arts Inc.’s dividend yield isn’t among the top-ranked, its stability, and positive growth rate make it a smart choice for investors who prefer growth regardless of how slow it is.
Many hedge funds with interest in the stock have recently made changes to their position, with Icon Wealth Partners LLC acquiring a position in the company during the first quarter, with an investment worth $28,000. North Star Investment Management Corp. also took up a position in the company, acquiring a new stake valued at $29,000. Many others, including Valeo Financial Advisors LLC, Ropes Wealth Advisors LLC, and Berman Capital Advisors LLC, also boosted their stakes in the stock.
In their latest quarterly results for the period ended June 30, 2019, Electronic Arts Inc. (NASDAQ:EA) posted revenue of $1.21 billion, a 6.33% growth in year over year basis. The company posted a 384.98% increase in net income to settled at $1.42 billion. Also experiencing a significant rise of more than 300% is the stock’s net profit margin and earnings per share.
Electronic Arts Inc. (NASDAQ:EA) had earlier posted its quarterly earnings for the period ended March 31, 2019. In that report, the company posted earnings per share of $1.21, beating Thomson Reuters’ consensus estimate by $0.43. Compared to the same quarter last year, Electronic Arts Inc. posted a $0.10 drop in earnings per share. For the quarter, EA has revenue of $1.36 billion, also beating analysts’ estimate by $0.16 billion. On a year-over-year basis, it delivered an 8.7% uptick in revenue.
Several Wall Street analysts have recently released their opinion on EA, with Cowen reaffirming its “Outperform” rating. On a research report released on July 31, Cowen predicted Electronic Arts’ price to hit $118. Needham, however, gave the stock a “buy.” They predicted the price to hit $120 a restatement of their previous prediction.
Just to show that Electronic Arts is showing a beautiful future, Zacks Investment Research upgraded the stock from a “hold” to “buy” and set the price target to $110. On average, the stock is currently having a “buy” rating and a stock price of $113.
Following the company’s better than expected quarterly earnings report, the company reported earnings per share of $2.60 on net bookings of $1.23 billion for the second quarter. In their 2020 forecast, Electronic Arts Inc. expects earnings of $9.22 per share on net bookings of $5.1 billion. The company explained that $5.61 of the $9.22 in earnings per share will be from income tax benefits.
This year, the company’s stock price has experienced a rise of more than 10%. With strategies to expand their market and win more subscribers, Electronic Arts Inc. believes that things can only get better, making it a stock to buy.