Raymond James maintains EA stock at Market Perform

On Wednesday, Raymond (NSE:RYMD) James analyst Andrew Marok maintained a Market Perform rating on shares of Electronic Arts (NASDAQ:EA), a $40.3 billion gaming giant with impressive 79.4% gross margins, post the company’s fourth-quarter fiscal year 2025 earnings release. According to InvestingPro data, EA’s stock has gained 19.3% over the past year, reflecting strong market confidence. Marok highlighted Electronic Arts’ strong performance in the quarter and the promising outlook for fiscal year 2026.

The analyst pointed to two critical factors from the quarter that met expectations: the positive reception of Battlefield and the resurgence of EA Sports FC after its January update. Trading at an EV/EBITDA multiple of 21x, InvestingPro analysis suggests the stock is currently fairly valued. Battlefield is expected to benefit from a favorable release schedule later in 2025, and EA Sports FC has shown significant improvement, indicating potential for continued success.

Marok emphasized that Electronic Arts’ guidance suggests robust growth, with possibilities to outperform projections through sustained momentum from EA Sports FC and upcoming launches of Battlefield and Skate. With an "GREAT" financial health score from InvestingPro, the company demonstrates strong fundamentals. The analyst noted that while Electronic Arts’ position has improved significantly compared to three months prior, the current valuation adequately reflects these positive changes. Additionally, investor interest in Electronic Arts has grown due to its reputation as a stable investment within the digital entertainment sector.

Electronic Arts’ recent report demonstrated the company’s ability to impress with its fourth-quarter results and its fiscal year 2026 forecast. The company’s key franchises, Battlefield and EA Sports FC, have performed well, contributing to a positive outlook for future growth.

Despite the strong performance and outlook, Raymond James’ assessment remains unchanged due to the stock’s valuation reflecting recent successes. The firm’s stance on Electronic Arts indicates recognition of the company’s current achievements while also taking into account market expectations and investor sentiment.

In other recent news, Electronic Arts Inc . (EA) reported its Q4 2025 earnings, revealing significant developments. The company announced a revenue of $1.9 billion, surpassing the forecasted $1.55 billion, though earnings per share (EPS) fell short of expectations at $0.98 compared to the anticipated $1.08. Despite the EPS miss, EA’s strong revenue performance was well-received, with stock rising by 6% post-announcement. The company’s net bookings for Q4 grew by 8%, driven by successful product launches, although FY 2025 net bookings saw a slight decrease of 1% compared to the previous year.

Looking ahead, EA provided optimistic guidance for FY 2026, projecting net bookings growth between 3% and 9%. The company anticipates this growth will be fueled by upcoming launches in its EA SPORTS portfolio and The Sims franchise. EA’s CEO, Andrew Wilson, highlighted the role of AI in enhancing creativity and innovation within the company. Meanwhile, potential challenges include cost management issues and declining performance in Apex Legends and catalog sales.

In terms of analyst activity, Morgan Stanley (NYSE:MS)’s Matthew Cost and Goldman Sachs’ Eric Sheridan participated in the earnings call, with discussions focusing on EA’s strategies and future prospects. Analyst inquiries touched on EA’s approach to community engagement and its development strategy for upcoming releases. Overall, these recent developments at Electronic Arts indicate a period of strategic growth and innovation, despite some challenges on the horizon.

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