EA’s latest financials
Electronic Arts’ (EA) revenue rose at a four-year CAGR (compound annual growth rate) of 7% to $5.2 billion in fiscal 2018, which ended on March 31, 2018. Its net income improved at a four-year CAGR of 26% to $1.4 billion. Its revenue fell 22% to $1.1 billion in the first quarter of fiscal 2019, which ended on June 30, 2018.
Full game downloads, live services, mobile services, and packaged goods generated 10%, 54%, 20%, and 16% of the company’s revenue, respectively. Higher digital net bookings, a FIFA World Cup content update, the launches of FIFA Mobile in China and FIFA 4 in Asia, more participants in FIFA competitive gaming, and the growth in The Sims 4‘s player base were the company’s primary revenue drivers. Its net income fell 66% to $38 million. The company remained optimistic about its Origin Access Premier subscription service and its tournaments for FIFA and Madden NFL.
A look at the forecasts
EA’s revenues are expected to be $5.3 billion, $5.8 billion, and $6.1 billion, respectively, in fiscal 2019, fiscal 2020, and fiscal 2021. Its expected net incomes for these years are $1.4 billion, $1.7 billion, and $1.8 billion, respectively. The stock has “strong buy,” “buy,” and “hold” recommendations from nine, 16, and four analysts, respectively. Its PE forecasts for the years are 22.7x, 19.4x, and 17.4x, respectively.
EA compared to the NASDAQ
At the end of last week, the NASDAQ Composite Index had beaten the stock in the last five days, in the last three months, in the last year, and year-to-date. The stock closed at a 32% discount to its 52-week high and a 4% premium to its 52-week low at the end of the week.
Electronic Arts launched its Origin Access Premier PC subscription service in July. Premier members will have access to the latest PC games, including Madden NFL 19, FIFA 19, Battlefield V, and Anthem.
The company introduced Madden NFL 19 on Origin for PC, Xbox One, and PlayStation 4 in August with Real Player Motion Technology and franchise mode augmentations. The company announced the availability of the Battlefield V open beta on Origin for PC, Xbox One, and PlayStation 4 in September.
In September, EA announced the sale of more than 24 million copies of FIFA 18. The company launched NBA Live 19 on Xbox One and PlayStation 4. It launched NHL 19 on PlayStation 4 and Xbox One, and it introduced FIFA 19 on PlayStation 4, Xbox One, and PC.
This month, Electronic Arts launched UFC 3 Notorious Edition. It also announced the first ever ePremier League tournament and announced that The Sims 4 Get Famous expansion pack would be available on PC and Mac in November.