Electronic Arts (NASDAQ: EA) is one of 68 publicly-traded companies in the “Application Software” industry, but how does it compare to its peers? We will compare Electronic Arts to similar businesses based on the strength of its dividends, institutional ownership, valuation, analyst recommendations, profitability, risk and earnings.

Risk and Volatility

Electronic Arts has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Electronic Arts’ peers have a beta of 1.14, suggesting that their average stock price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares Electronic Arts and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Electronic Arts $4.85 billion $967.00 million 29.67
Electronic Arts Competitors $954.67 million $64.66 million 461.79

Electronic Arts has higher revenue and earnings than its peers. Electronic Arts is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations and price targets for Electronic Arts and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Electronic Arts 0 3 22 0 2.88
Electronic Arts Competitors 193 1584 3037 99 2.62

Electronic Arts currently has a consensus price target of $123.51, suggesting a potential upside of 9.54%. As a group, “Application Software” companies have a potential upside of 9.84%. Given Electronic Arts’ peers higher probable upside, analysts plainly believe Electronic Arts has less favorable growth aspects than its peers.

Institutional & Insider Ownership

94.5% of Electronic Arts shares are held by institutional investors. Comparatively, 68.5% of shares of all “Application Software” companies are held by institutional investors. 2.6% of Electronic Arts shares are held by company insiders. Comparatively, 15.6% of shares of all “Application Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Electronic Arts and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Electronic Arts 23.35% 28.92% 15.51%
Electronic Arts Competitors -67.65% -110.30% -18.08%

Summary

Electronic Arts beats its peers on 8 of the 13 factors compared.

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. The Company markets and sells its games and services through retail channels and through digital distribution channels. The Company’s PC games and additional content can be downloaded directly through its Origin online platform, as well as through third-party online download stores. Its mobile, tablet and PC free-to-download games and additional content are available through third-party application storefronts, such as the Apple Application Store and Google Play.

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