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Electronic Arts (EA) Outpaces Stock Market Gains: What You Should Know

Electronic Arts (EA) closed the most recent trading day at $132.50, moving +1.3% from the previous trading session.

This story originally appeared on Zacks

Electronic Arts (EA) closed the most recent trading day at $132.50, moving +1.3% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.28%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq gained 0.14%.

- Zacks

Coming into today, shares of the video game maker had gained 3.11% in the past month. In that same time, the Consumer Discretionary sector lost 2.13%, while the S&P 500 gained 0.12%.

Investors will be hoping for strength from Electronic Arts as it approaches its next earnings release, which is expected to be February 1, 2022. On that day, Electronic Arts is projected to report earnings of $3.20 per share, which would represent year-over-year growth of 3.56%. Meanwhile, our latest consensus estimate is calling for revenue of $2.66 billion, up 11.02% from the prior-year quarter.

EA's full-year Zacks Consensus Estimates are calling for earnings of $7.10 per share and revenue of $7.67 billion. These results would represent year-over-year changes of +23.26% and +23.95%, respectively.

Investors should also note any recent changes to analyst estimates for Electronic Arts. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.94% higher. Electronic Arts is currently a Zacks Rank #2 (Buy).

Digging into valuation, Electronic Arts currently has a Forward P/E ratio of 18.42. For comparison, its industry has an average Forward P/E of 16.82, which means Electronic Arts is trading at a premium to the group.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 108, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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