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How EA Compares with Peers: Revenue Growth and Other Metrics

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Revenue growth expected for EA and peers

In the table below, you can see that analysts expect revenue growth for Electronic Arts (EA) to continue in fiscal 2018 and beyond. Analysts expect EA’s revenue to rise 13% in fiscal 4Q18, 4.4% in fiscal 2018, and 8.9% in fiscal 2019. Revenue for Zynga (ZNGA), Activision Blizzard (ATVI), NetEase (NTES), and Take-Two Interactive (TTWO) is expected to rise 7.3%, 29%, 5%, and 47%, respectively, this fiscal year.

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Profit margins

EA’s operating margin is high, at 32.2%, while ATVI leads with an operating margin of almost 35%. Zynga, NetEase, and TTWO have operating margins of 14.3%, 19%, and 24%, respectively. EA’s price-to-earnings ratio for 2018 is 36.81x, and it’s expected to fall to 30.15x next year. NetEase has a relatively low price-to-earnings ratio for 2018 at 19.76x, while Zynga, TTWO, and ATVI have ratios of 42.74x, 71.39x, and 39.54x, respectively, for 2018.

EA’s management is optimistic about long-term performance and is banking on a diversified gaming portfolio to drive revenue growth and increase shareholder value. CFO Blake Jorgensen stated, “Through the fourth quarter and fiscal 2019, we’ll be launching games across five different genres, on three different platforms, and to players around the world. We expect growth in full-game downloads, subscriptions, extra content, and in our mobile business.”

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