Electronic Arts Inc. (EA)
Quantitative Summary
DeterministicElectronic Arts Inc.'s P/E of 57.5 is above its sector average (32.1x), though accompanied by a 5.5% economic spread (ROIC − WACC). Financial health metrics are strong: Piotroski 7/9, Altman Z 6.9 (above 3.0 safe zone threshold). DCF fair value of $154 implies 24% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedElectronic Arts Inc. demonstrates robust fundamental quality characterized by a significant ROIC-WACC spread of 5.4%, indicating efficient capital deployment relative to its cost of equity. The DuPont decomposition reveals that the 17.5% return on equity is primarily driven by exceptional net margins at 15.0% and moderate leverage, rather than asset turnover efficiency which sits at 0.60x. This operational resilience is corroborated by a high Piotroski F-Score of 7/9, an Altman Z-Score of 6.8 suggesting low bankruptcy risk, and a Beneish M-Score of -2.66 that points to minimal earnings manipulation concerns. However, the trajectory shows divergence as revenue contracted slightly year-over-year by 1.3%, while profitability metrics face headwinds reflected in a negative Profitability Factor (RMW) alpha of -0.243.
Valuation metrics present a stark contrast between current market pricing and intrinsic value models. The stock trades at a premium P/E ratio of 76.3x, significantly exceeding the sector average of 27.3x, which implies the market is anticipating sustained high growth despite recent top-line softness. Conversely, the discounted cash flow model assigns a fair value that suggests -26.6% downside from current levels based on an implied ten-year free cash flow growth rate of 9.9%. This wide valuation gap highlights a potential disconnect where investors are pricing in aggressive future expansion that has not yet materialized in financial statements, creating a scenario where the market's expectations may be overly optimistic relative to fundamental earnings power.
Risk assessment reveals conflicting signals regarding factor exposure and insider sentiment. The stock exhibits strong momentum with an annual Fama-French alpha of 28.58%, contrasting sharply with its negative value tilt (HML: 0.285) which indicates it is not behaving like a traditional deep-value asset. Yet, this positive performance coincides with $5,553,294 in net insider selling over the last ninety days, suggesting internal stakeholders may view current valuations as fully priced or elevated given the recent revenue contraction and weak profitability factor delta.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of -1% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 7.2% | 9.2% | 11.2% |
|---|---|---|---|
| 2% | $190 | $137 | $107 |
| 3% | $227 | $154 | $116 |
| 4% | $288 | $177 | $128 |
Center = base case. Green = >10% upside, Red = >10% downside vs $202.01.
Pre-computed DCF: WACC=9.2%, terminal growth 3%. Fair value $154 (-24.1%). Not investment advice.
Valuation Context
Currently trading 99% above its 5-year average P/E of 38.1x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedElectronic Arts Inc. is currently trading at $201.70, a price point that requires contextualization against its moving average envelope to assess relative value. Without specific upper and lower band data or the current position of the stock within those bounds, it remains unclear whether this level represents an extension above recent means or a compression below them. If the price were significantly elevated relative to the standard deviation bands defined by the SMA envelope, historical patterns often suggest increased volatility and a higher probability of statistical mean reversion toward the central trend line. Conversely, if the current valuation sits near the lower boundary of such an envelope, it might indicate a floor where oversold conditions could theoretically trigger a corrective bounce back toward equilibrium. The absence of defined band limits prevents a definitive conclusion on whether the asset is in a state of overextension or underreaction relative to its recent average price behavior. Technical analysis relies heavily on these spatial relationships between spot prices and volatility bands to gauge potential reversal zones; however, with only the absolute share price provided, one cannot determine if $201.70 constitutes an attractive entry based on mean-reversion logic or a dangerous overbought condition. The market's current trajectory relative to its moving averages remains unknown, meaning any assessment of future price convergence is speculative without further data regarding the envelope's width and the stock's specific placement within it.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-27 | $0.1900 | 0.0% |
| 2026-02-25 | $0.1900 | 0.0% |
| 2025-12-03 | $0.1900 | 0.0% |
| 2025-08-27 | $0.1900 | 0.0% |
| 2025-05-28 | $0.1900 | 0.0% |
| 2025-02-26 | $0.1900 | 0.0% |
| 2024-11-27 | $0.1900 | 0.0% |
| 2024-08-28 | $0.1900 | 0.0% |
| 2024-05-29 | $0.1900 | 0.0% |
| 2024-02-27 | $0.1900 | 0.0% |
| 2023-11-28 | $0.1900 | 0.0% |
| 2023-08-29 | $0.1900 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLC or VOX, the fund manager is mechanically forced to buy or sell EA shares regardless of Electronic Arts Inc.'s individual fundamentals. We estimate $8.4B of passive capital is structurally linked to EA through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Electronic Arts Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Electronic Arts Inc. (EA) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Facebook Inc. Class A (META) as the most exposed collateral stock, sharing 1 ETFs with EA. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 32 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
EA Ownership Dynamics
Passive funds hold 1 in every 6 EA shares, reducing daily market volatility.
Electronic Arts Inc. (EA) exerts notable gravity on the passive index market, currently representing 4.2% of the State Street Communication Services Select Sector SPDR ETF (XLC) and 2.0% of the VOX (VOX). Across 32 tracked ETFs, approximately 46M shares (18.2% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest EA Exposure
Float lock-up computed from 32 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
EA Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Electronic Arts Inc. over the past year sits near $200.07 (35% of 252-day volume). The current price of $202.01 trades 1.0% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (35% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
EA Capital Efficiency
How efficiently does Electronic Arts Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Electronic Arts Inc. converts 92% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 5.5% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-12 | 111 | $200.22 | $22,224.42 |
| 2026-04-20 | 119 | $203.83 | $24,255.77 |
| 2026-04-15 | 3 | $202.85 | $608.55 |
| 2026-04-09 | 95,718 | $203.99 | $19.5M |
| 2026-04-08 | 5,858 | $203.95 | $1.2M |
| 2026-03-25 | 20,723 | $201.62 | $4.2M |
| 2026-03-17 | 7 | $200.21 | $1,401.47 |
| 2026-03-09 | 3,039 | $198.00 | $601,722 |
| 2026-02-05 | 23,851 | $196.84 | $4.7M |
| 2026-01-23 | 1,900 | $204.38 | $388,322 |
| 2026-01-21 | 3,497 | $204.00 | $713,388 |
| 2026-01-20 | 1,700 | $204.25 | $347,225 |
| 2026-01-15 | 51 | $204.20 | $10,414.2 |
| 2026-01-08 | 6,273 | $204.50 | $1.3M |
| 2026-01-02 | 200 | $204.33 | $40,866 |
| 2025-12-23 | 183 | $203.79 | $37,293.57 |
| 2025-12-22 | 1,500 | $203.92 | $305,880 |
| 2025-12-19 | 9,464 | $203.90 | $1.9M |
| 2025-12-15 | 300 | $203.73 | $61,119 |
| 2025-11-25 | 79,452 | $201.05 | $16.0M |
| 2025-11-24 | 392 | $200.69 | $78,670.48 |
| 2025-11-20 | 306 | $201.58 | $61,683.48 |
| 2025-11-04 | 4,551 | $199.89 | $909,699.39 |
| 2025-11-03 | 5,141 | $200.06 | $1.0M |
| 2025-10-21 | 73 | $200.59 | $14,643.07 |
| 2025-10-20 | 6,693 | $200.30 | $1.3M |
| 2025-10-15 | 300 | $200.20 | $60,060 |
| 2025-10-09 | 3 | $200.01 | $600.03 |
| 2025-10-08 | 3 | $200.02 | $600.06 |
| 2025-10-06 | 3 | $200.69 | $602.07 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| FE | 0.257 | 0.049 | Low correlation |
| ETR | 0.257 | 0.048 | Low correlation |
| TKO | 0.248 | 0.179 | Low correlation |
| TTWO | 0.231 | 0.396 | Low correlation |
| COR | 0.218 | 0.352 | Low correlation |
| PPL | 0.215 | 0.009 | Low correlation |
| AEP | 0.215 | -0.059 | Low correlation |
| NI | 0.212 | 0.053 | Low correlation |
| ECL | 0.211 | 0.093 | Low correlation |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare EA to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.