Electronic Arts (EA) - Share Chat

I did not find a chat about this stock.

I’m looking into gaming stocks. Debating between EA and Activision Blizzard.

EA fundamentals

Screenshot 2020-05-13 at 14.46.42

Screenshot 2020-05-13 at 14.47.11

Activision Blizzard fundamentals
Screenshot 2020-05-13 at 14.48.58
Screenshot 2020-05-13 at 14.48.31

Based on P/E ration and EPS, EA seems like a better opportunity. Are there any gamers here keen to weigh in?

I did a write up on activision blizzard and honestly I prefer EA.

EA feels like a stronger company right now, less issue, more focused revenue streams which they are growing.

Also much better momentum, the future share price growth is higher.

They have both rallied with COVID-19 but if I had to pick I would go for EA.

That’s a solid writeup. I enjoyed reading it. Thank you.

Activision gets more credit, but I prefer EA better too. The fundamentals are a lot stronger. Low levels of debt, highly profitable, low PE ratio, and, surprisingly to me, nearly $6 billion in cash reserves. For that cash reserve alone, Electronic Arts is probably one of the safest stocks to own. I’m planning to buy tomorrow.

1 Like

Has anyone considered Electronic Arts before?

:white_check_mark:High returns on assets over the 10 year

:white_check_mark:Low Debt

:white_check_mark:Strong business - Sticky product. Games titles have cult following - Fifa. Plus network effects of many players on the platform

:white_check_mark:€36bil market cap reasonably price compared to cashflows

I’d buy - maybe not a rapid grower, but a slow plonder which beats the market consistently each year.

For more - https://mobile.twitter.com/_JosephWilks

Yes.

I did a wee numbers crunching:

@jcksmith850 did a nice write up as well.

At the time it seemed like a solid opportunity.

Are you buying the share?

I’ve been looking at it over the last few days. Seems at a discount as perhaps moving away from being a complete growth play…I will consider buying at under/around 115

It’s the guidance which sent it down rather than the previous Q performance I believe?

I’d be too wary of any law changes that surround the in-game loot boxes. I imagine this is where they make most of their money - especially in FIFA Ultimate Team, Apex Legends etc. (£billions lost if they get outlawed).

3 Likes

Both EA and Activision blizzard are safe bets at the moment. Between them they own the Star Wars license for games (EA), FIFA, Madden, NBA (EA) Call of duty (ATVI) World of Warcraft (ATVI) and still the cash cow which is Heartstone and the upcoming Diablo Mobile game which love or hate it will make billions in the Asian markets. Not forgetting that Tencent own a large chunk of Activision Blizzard, which could cause issues for those who are vary of supporting Chinese trade.

They maybe the two most hated game distributors among gamers, but they still keep on making monthly battle passes and the same games each year and people still keep on buying them. Most of these games have moved on from loot boxes to more elaborate seasons passes, so any new law is unlikely to cause disruption.

1 Like

EA has the better fundamentals in my opinion. Next to no debt.

Reminds me of a Disney like company, bringing out the same titles and customers will to still pay for them. Except with network effects. FIFA for example comes out with a new set of players each year and you still buy the upgrade to play your friends on. I believe with that attention they can extract cashflows despite the banning of loot boxes.

1 Like