This story originally appeared on Zacks
In the latest trading session, Electronic Arts (EA) closed at $133.47, marking a +0.32% move from the previous day. This change outpaced the S&P 500’s 0.1% loss on the day. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq lost 0.1%.
Coming into today, shares of the video game maker had gained 6.53% in the past month. In that same time, the Consumer Discretionary sector lost 1.14%, while the S&P 500 gained 4.4%.
Investors will be hoping for strength from Electronic Arts as it approaches its next earnings release. The company is expected to report EPS of $3.20, up 3.56% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.66 billion, up 11.02% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.05 per share and revenue of $7.67 billion, which would represent changes of +22.4% and +23.95%, respectively, from the prior year.
Any recent changes to analyst estimates for Electronic Arts should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Electronic Arts is currently a Zacks Rank #2 (Buy).
Digging into valuation, Electronic Arts currently has a Forward P/E ratio of 18.87. Its industry sports an average Forward P/E of 18.85, so we one might conclude that Electronic Arts is trading at a premium comparatively.
The Toys – Games – Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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