Opinions
Martin Cobb, ASIP
Electronic Arts Inc
EA-Q
TOP PICK
Feb 05, 2025
$128.800
Stock price when the opinion was issued
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Stockchase Research Editor: Michael O'Reilly This top video game developer has seen recent quarter sales be up 22% with recent releases of key game updates like FIFA 23 (the largest launch in EA FIFA franchise history). The company is shifting more to a subscription revenue style that will add longevity. It has been using some cash reserves to buy back shares. We recommend placing a stop-loss at $100, looking to achieve $151 -- upside over 26%. Yield 0.6% (Analysts’ price target is $150.64)
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Stockchase Research Editor: Michael O'Reilly We reiterate this top video game developer as a TOP PICK. With the 2022 World Cup starting, the release of FIFA 23 has been the largest launch in EA FIFA franchise history. The company is shifting more to a subscription revenue style that will add longevity. It has prudently been using some cash reserves to buy back shares. We recommend trailing up the stop-loss (from $100) to $114, looking to achieve $149 -- upside over 15%. Yield 0.5% (Analysts’ price target is $148.76)
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This pick results from his looking at the application layer 12 months down the road. Model training algorithms are already being monetized in healthcare, education, and now sports/entertainment. Investor day last week saw a lot of AI tools. Yield is 0.5%.
12-month price target of $167.50. Buy 1/3 here around $141, $134, and $125.
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PAST TOP PICK
(A Top Pick Feb 05/25, Up 13%)
They have a lot of sports titles. They lost FIFA, but have their own soccer franchise, plus baseball and basketball. Sports are steady as opposed to companies depending on a few hit games. Ultimately, someone will buy them out, like Netflix or Amazon or Apple, who could pay twice the multiple.
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Likes the portfolio, though a bit weak in mobile. Discretionary spend on some titles has been a bit lower. Over the long term, can grow 5-6%. 30% free cashflow margins, enough to buy back 5-6% of shares every year. In-game transactions are 99% gross margins. Yield is 0.6%.
(Analysts’ price target is $146.38)