Zacks Investment Research cut shares of Electronic Arts Inc. (NASDAQ:EA) from a hold rating to a sell rating in a report issued on Wednesday.
According to Zacks, “Electronic Arts reported fourth quarter fiscal 2017 results wherein earnings came in much lower than prior year quarter whereas revenues increased year over year. Continued increases in digital revenues and strength in mobile games (Star Wars: Galaxy of Heroes) and FIFA 17 as well as Battlefield 1 were the driving factors. Apart from growing digital business, cost optimization initiatives will be beneficial going forward. However, the video game industry is hit driven. Though EA has a powerful line up of games that can be repeatedly upgraded, there is no assurance that a particular game will be a hit. We believe the underperformance of any title would affect results. Even stiff competition is a big concern. Though shares have outperformed the Zacks industry over the past one year, the stock trades at high P/B multiple, at current market price, which restricts its upside potential. “
Other equities research analysts have also issued reports about the stock. Mizuho set a $ 115.00 price objective on shares of Electronic Arts and gave the stock a buy rating in a report on Wednesday. MKM Partners restated a buy rating and issued a $ 109.00 price objective (up from $ 95.00) on shares of Electronic Arts in a report on Friday, May 5th. Bank of America Corp restated a neutral rating and issued a $ 104.00 price objective on shares of Electronic Arts in a report on Monday. Vetr upgraded shares of Electronic Arts from a hold rating to a buy rating and set a $ 99.98 price objective for the company in a report on Monday. Finally, Piper Jaffray Companies restated a buy rating and issued a $ 99.00 price objective on shares of Electronic Arts in a report on Monday, May 1st. One investment analyst has rated the stock with a sell rating, four have assigned a hold rating and eighteen have assigned a buy rating to the company. The stock presently has a consensus rating of Buy and an average target price of $ 101.97.
Shares of Electronic Arts (NASDAQ:EA) traded up 0.39% on Wednesday, reaching $ 108.58. 5,750,574 shares of the company were exchanged. The company’s 50 day moving average is $ 91.70 and its 200 day moving average is $ 84.57. The firm has a market capitalization of $ 33.47 billion, a PE ratio of 26.36 and a beta of 0.65. Electronic Arts has a 12-month low of $ 71.01 and a 12-month high of $ 110.61. Electronic Arts also was the target of some unusual options trading activity on Monday. Investors purchased 26,487 call options on the stock. This represents an increase of 992% compared to the typical volume of 2,425 call options.
Electronic Arts (NASDAQ:EA) last announced its earnings results on Tuesday, May 9th. The game software company reported $ 0.58 earnings per share (EPS) for the quarter, missing the consensus estimate of $ 0.61 by $ 0.03. Electronic Arts had a net margin of 28.10% and a return on equity of 27.22%. The company had revenue of $ 1.53 billion for the quarter, compared to the consensus estimate of $ 1.09 billion. During the same quarter in the previous year, the firm earned $ 0.50 earnings per share. The company’s revenue for the quarter was up 16.7% compared to the same quarter last year. Analysts forecast that Electronic Arts will post $ 4.21 earnings per share for the current year.
In other news, EVP Joel Linzner sold 5,000 shares of the company’s stock in a transaction dated Wednesday, May 10th. The shares were sold at an average price of $ 105.97, for a total value of $ 529,850.00. Following the sale, the executive vice president now directly owns 16,745 shares of the company’s stock, valued at approximately $ 1,774,467.65. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Andrew Wilson sold 108,000 shares of the company’s stock in a transaction dated Monday, May 1st. The stock was sold at an average price of $ 94.99, for a total transaction of $ 10,258,920.00. Following the completion of the sale, the chief executive officer now directly owns 100,000 shares in the company, valued at $ 9,499,000. The disclosure for this sale can be found here. Insiders sold a total of 202,249 shares of company stock worth $ 18,720,065 over the last ninety days. Insiders own 3.46% of the company’s stock.
A number of hedge funds have recently made changes to their positions in EA. South Texas Money Management Ltd. increased its stake in shares of Electronic Arts by 61.6% in the third quarter. South Texas Money Management Ltd. now owns 278,621 shares of the game software company’s stock valued at $ 23,794,000 after buying an additional 106,160 shares during the period. Pegasus Partners Ltd. increased its stake in shares of Electronic Arts by 2.3% in the fourth quarter. Pegasus Partners Ltd. now owns 11,255 shares of the game software company’s stock valued at $ 886,000 after buying an additional 250 shares during the period. Foundry Partners LLC increased its stake in shares of Electronic Arts by 17.9% in the first quarter. Foundry Partners LLC now owns 13,944 shares of the game software company’s stock valued at $ 1,248,000 after buying an additional 2,116 shares during the period. Morgan Stanley increased its stake in shares of Electronic Arts by 41.5% in the third quarter. Morgan Stanley now owns 964,600 shares of the game software company’s stock valued at $ 82,376,000 after buying an additional 282,917 shares during the period. Finally, Cigna Investments Inc. New purchased a new stake in shares of Electronic Arts during the fourth quarter valued at approximately $ 867,000.
About Electronic Arts
Electronic Arts Inc develops, markets, publishes and distributes games, content and services that can be played by consumers on a range of platforms, which include consoles, personal computers (PCs), mobile phones and tablets. The Company’s games and services are based on a portfolio of intellectual property that includes established brands, such as FIFA, Madden NFL, Star Wars, Battlefield, the Sims and Need for Speed.
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