Video game titan Electronic Arts (NASDAQ:EA) brought out a sound earnings report, in which it brought beats to both expected earnings and expected revenue in what was an overall quiet quarter. Better yet, the company also offered a positive look at the upcoming quarter, enough to help the company gain around 2% at one point in premarket trading. The gains lasted at least somewhat into the morning's trading—though some downward pressure was seen after the opening—and with a bullish consensus from analysts that's lasted for years now, the news is looking good out of EA.
EA Earnings Report Proves an Unlocked Achievement
The latest EA earnings report turned in a sound quarter. EA reported earnings of $1.23 per share, adjusted, as compared to an expected figure from analysts of $1.05 per share, and a year-ago figure of $1.08 per share. EA landed this figure on the strength of $1.49 billion in net bookings, which again beat analyst expectations looking for $1.39 billion, and the year-ago figures of $1.21 billion as well.
The current quarter, though, didn't look quite so bright. EA offered guidance looking for an adjusted earnings figure of $0.55 per share with $1.25 billion in net bookings. Analysts, however, were projecting $0.62 per share in earnings but on lower net bookings, $1.16 billion total.
Finally, EA issued full-year guidance, which proved similar to the current quarter. The guidance called for a miss on earnings—but a very narrow one—on the strength of far better sales than analysts expect. EA looks for adjusted earnings of $6.15 per share with net sales of $7.3 billion. Analysts, meanwhile, were looking for adjusted earnings of $6.16 per share against net sales of $6.6 billion.
EA's Chief Financial Officer, Blake Jorgenson, noted that the company had a strong quarter, backed up by the “extraordinary performance” of recent release “Apex Legends”, as well as live-services based games. “Apex Legends” delivered substantially, as Jorgenson noted that the game delivered “...the best day, the best 24-hour period, the best week, the best month and the best in-game event” for the company. Original projections called for “Apex Legends” to bring in better than $1 billion by the end of the quarter; it had actually delivered that number in right around half of the quarter.
What Are Financial Analysts Saying About EA Stock?
Those looking for word about EA stock from financial analysts will not be disappointed, based on our latest research. While the consensus is not as bullish as it once was, it is still quite bullish, and has been so for some time. EA has had a consensus “buy” rating for the last two years.
A year ago, EA had one “strong buy” rating, 19 “buy” ratings, and nine “hold” ratings to its credit. Today, it has 15 “buy” ratings and 11 “hold” ratings, a ratio that's held since mid-April.
EA price targets as a whole have a moderate range; the current average is $156.25 with a high of $181 and a low of $120. With EA currently trading at $138.70, there's quite a bit of upside potential among the consensus figures.
In fact, recent movement from analysts has been generally positive. Earlier today, Needham & Co. reiterated its “buy” rating on the company with a price target of $165, and Benchmark upped its price target from $177 to $181, the current high. Two days ago, Credit Suisse upgraded its price target from $160 to $167. So far this year, there has been only one downgrade, as Atlantic Securities pulled back from “overweight” to “neutral”.
