Electronic Arts Inc. (EA) Stock Valuation — PE Analysis
Electronic Gaming & Multimedia · NASDAQ
Current Price
$209.70
PE Ratio (TTM)
48.4x
Intrinsic Value
$186.42
-12.5% margin of safety
COMPETITIVE MOAT
↑Strong Brand & Franchise Power
EA possesses iconic franchises like FIFA (now EA SPORTS FC) and Madden NFL. These brands command significant player loyalty and generate consistent demand.
↑Network Effects in Live Services
EA's online multiplayer games benefit from network effects. More players attract more players, enhancing the experience and creating stickiness for its live service titles.
↑Deep Platform Integration & Data
EA's extensive player data and established platform infrastructure allow for targeted content delivery and personalized experiences, increasing engagement and retention.
INVESTMENT RISKS
↓Dependence on Key Franchises
EA's revenue is heavily reliant on a few major franchises. Any decline in popularity or missteps in these titles could significantly impact financial performance.
↓Evolving Player Preferences
The gaming landscape is dynamic. Failure to adapt to changing player tastes, emerging genres, or new monetization models could lead to declining engagement.
↓Regulatory Scrutiny & Monetization
Increased scrutiny on in-game purchases and loot boxes could lead to regulatory changes that impact EA's profitable monetization strategies.
Base case
EA base case PE valuation
A base case PE valuation for EA estimates a fair value of about $186.42 per share, against a current price of $209.7. The model assumes 5.2% annual earnings growth, a 48.77x target PE multiple, and a 10% discount rate.
Intrinsic Value
$186.42
Margin of safety
-12.5%
Expected annual return
-2.3%
Base case assumptions: 5.2% annual earnings growth, 48.77x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-05.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the EA PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Electronic Arts Inc. respond.
Open PE Calculator for EACompany Overview
Electronic Arts Inc., established in 1982 and based in Redwood City, California, is a global leader in the creation, promotion, publication, and distribution of interactive entertainment. The company delivers a wide array of games, content, and services for various platforms, including gaming consoles, personal computers, smartphones, and tablets across the globe. EA develops and releases titles spanning popular genres such as sports, racing, first-person shooters, action, role-playing, and simulation. Its prominent proprietary franchises include Battlefield, The Sims, Apex Legends, and Need for Speed, alongside celebrated licensed properties like FIFA, Madden NFL, UFC, and Star Wars. Furthermore, Electronic Arts grants licenses for its games to external partners for distribution and hosting. The company reaches its customers through diverse channels, encompassing digital storefronts, traditional retail outlets, direct sales to major retailers and specialty shops, and various distribution agreements.
Financial Metrics — EA PE Stock Valuation Data
PE Ratio (TTM)
48.4x
PEG Ratio
5.87
Earnings Yield
2.05%
ROE (TTM)
16.7%
Revenue/Share (TTM)
$31.13
Dividend Yield
0.36%
Debt/Equity
0.21x
Frequently Asked Questions
What is the PE ratio of EA?
The trailing twelve-month PE ratio of EA reflects how much investors pay per dollar of Electronic Arts Inc.'s earnings. This metric is most useful when compared to Electronic Gaming & Multimedia peers and the company's own historical range.
Is EA overvalued based on PE ratio?
EA's PE of 48.4x combined with a PEG ratio of 5.87 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Electronic Gaming & Multimedia, a DCF analysis may be more appropriate.
How do I value EA stock using PE ratio?
To value Electronic Arts Inc. using PE: (1) Compare the current PE (48.4x) against the Electronic Gaming & Multimedia median to assess relative pricing, (2) check the PEG ratio (5.87) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of EA?
EA's PEG ratio is 5.87, calculated by dividing the PE ratio (48.4x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for EA stock valuation?
PE ratio gives a quick relative read — how EA is priced versus Electronic Gaming & Multimedia peers. DCF provides an absolute value based on projected free cash flows. For EA, with a strong ROE of 16.7%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See EA DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value EA with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-05. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.