Roth/MKM lowers Electronic Arts stock target, citing modest release schedule

On Wednesday, Roth/MKM revised its outlook on Electronic Arts (NASDAQ: ) stock, lowering the price target to $135.00 from $140.00. The company maintains a neutral rating.

The revision comes as EA is expected to be able to maintain its early guidance for its fiscal 2025 earnings per share (EPS) outlook, which expects mid- to high-single-digit growth, which is believed to be supported by cost-cutting measures support.

The analyst expressed concern about Electronic Arts' ability to meet its low-single-digit bookings expectations. The company's launch schedule for fiscal 2025 is expected to be moderate, and there is uncertainty about the performance of Live Services. These services are an ongoing source of revenue from games that are constantly updated with new content and features.

The key challenge Roth/MKM identified for Electronic Arts was the lack of clarity around the company's development pipeline. This refers to the upcoming games and content the company plans to release, which is a key factor for investors and analysts in assessing a company's future growth potential.

The new price target of $135.00 is based on approximately 18 times Roth/MKM estimates of EA's fiscal 2025 earnings per share. The company's financial performance over the next few years.

Investment Professional Insights

InvestingPro data and tips can give you a deeper understanding of Electronic Arts, Inc.'s (NASDAQ: EA ) financial health and market position. With a market capitalization of $33.91 billion and a P/E ratio of 31.93, EA trades at a premium relative to its earnings. The company's P/E ratio has adjusted slightly better over the last 12 months to Q3 2024, at 29.03. Although revenue grew slightly by 3.8% during the same period, the company's gross profit margin remained at a strong level of 76.48%, reflecting its ability to maintain profitability.

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Electronic Arts has also demonstrated its commitment to shareholder returns by increasing dividends for four consecutive years. The current dividend yield is 0.6%, and the last ex-dividend date is February 27, 2024. Additionally, InvestingPro Tips shows that EA is expected to be profitable this year and has been profitable over the past 12 months.

For investors looking for additional insights, there are more InvestingPro Tips available, including a company's liquidity position and analyst forecasts.To explore these further, visit and remember to use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount. There are 11 additional InvestingPro tips that can provide valuable guidance for your investment decisions.

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