Electronic Arts stock (NASDAQ
NDAQ
: EA) is up 7% in the last two months and looks like it has more room for growth. EA stock has risen from $117 in early February to $125 now. This performance compares with a -0.3% return for the broader S&P500 index. Looking at a slightly longer term, EA stock is up 16% from levels in late 2019. This can be attributed to 1. a 47% rise in Electronic Arts revenue to $7.3 billion, 2. its average shares outstanding falling 8% to 274 million, partly offset by 3. the company’s P/S ratio, which plunged 27% to 4.7x trailing revenues from 6.5x in 2019. Our interactive dashboard, Why Electronic Arts Stock Moved, has more details.
Electronic Arts’ recent revenue growth has been driven by its live services offering, primarily for the FIFA franchise. Furthermore, the company benefits from recent acquisitions, including Playdemic, Codemasters, Metalhead Software, and Glu Mobile
GLUU
. The company benefited from lockdowns during the pandemic, as gamers spent more time on gaming. However, this trend has now cooled off. Looking forward, the company should benefit from the release of Star Wars Jedi: Survivor later this month.
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