Electronic Arts Inc. (EA) Stock Valuation — PE Analysis
Electronic Gaming & Multimedia · NASDAQ
Current Price
$203.27
PE Ratio (TTM)
57.3x
Intrinsic Value
$263.53
+22.9% margin of safety
COMPETITIVE MOAT
↑Dominant Sports Licenses
EA holds exclusive licenses for major sports leagues like NFL and FIFA (now EA SPORTS FC). This creates a significant barrier to entry for competitors in these highly popular game genres.
↑Established Franchise Brands
Long-standing franchises such as Madden NFL and EA SPORTS FC have cultivated massive, loyal player bases. These established brands benefit from strong brand recognition and community engagement.
↑Live Service Ecosystem
EA's focus on live service games, particularly in sports, fosters ongoing player engagement and recurring revenue through in-game purchases and subscriptions. This creates a sticky ecosystem.
INVESTMENT RISKS
↓License Expiration and Competition
The reliance on exclusive licenses presents a risk if these agreements are not renewed or if competitors secure similar rights. This could erode market share in key franchises.
↓Shifting Player Preferences
The gaming landscape is dynamic, with evolving player tastes and the rise of new genres or platforms. EA must continuously innovate to remain relevant and avoid alienating its core audience.
↓Dependence on Sports Titles
A significant portion of EA's revenue is tied to its sports franchises. Any disruption or decline in the popularity of these specific sports could disproportionately impact the company's financial performance.
Base case
EA base case PE valuation
A base case PE valuation for EA estimates a fair value of about $263.53 per share, against a current price of $203.27. The model assumes 17.0% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.
Intrinsic Value
$263.53
Margin of safety
+22.9%
Expected annual return
+5.3%
Base case assumptions: 17.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
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)
57.3x
PEG Ratio
n/m
Earnings Yield
1.75%
ROE (TTM)
14.2%
Revenue/Share (TTM)
$30.12
Dividend Yield
0.37%
Debt/Equity
0.23x
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 57.3x combined with a PEG ratio of -3.48 provides a growth-adjusted perspective. EA has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. 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 (57.3x) against the Electronic Gaming & Multimedia median to assess relative pricing, (2) check the PEG ratio (-3.48) 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 -3.48, calculated by dividing the PE ratio (57.3x) by the expected earnings growth rate. Because EA has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. 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 the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. 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 Communication Services 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.