Electronic Arts Inc. (EA) Stock Valuation — PE Analysis
Electronic Gaming & Multimedia · NASDAQ
Current Price
$209.43
PE Ratio (TTM)
59.0x
Intrinsic Value
$156.4
-33.9% margin of safety
COMPETITIVE MOAT
↑Strong Brand & Franchise Power
EA possesses iconic sports franchises like FIFA (now EA SPORTS FC) and Madden NFL, creating significant brand loyalty and player engagement. These titles drive consistent revenue and player retention.
↑Network Effects in Online Play
Massive player bases in EA's multiplayer games foster strong network effects. More players attract more players, enhancing the value of the online experience and making it harder for new entrants.
↑High Switching Costs for Core Gamers
Dedicated players invest significant time and money into EA's ecosystems, building player profiles and virtual economies. This creates inertia, making it costly and inconvenient to switch to competing platforms or games.
INVESTMENT RISKS
↓Potential Acquisition Uncertainty
The ongoing EU approval process for a potential $55 billion acquisition by a Saudi-led investor group introduces significant uncertainty regarding EA's future ownership and strategic direction.
↓Regulatory Scrutiny & Antitrust Concerns
Large gaming acquisitions often face intense regulatory scrutiny. Delays or conditions imposed by antitrust bodies could impact the deal's completion or EA's operational freedom.
↓Dependence on Sports Licensing
EA's most lucrative franchises are heavily reliant on exclusive sports licenses. Changes in licensing agreements or the emergence of competing sports games could severely impact revenue streams.
Base case
EA base case PE valuation
A base case PE valuation for EA estimates a fair value of about $156.4 per share, against a current price of $209.43. The model assumes 5.0% annual earnings growth, a 50x target PE multiple, and a 10% discount rate.
Intrinsic Value
$156.4
Margin of safety
-33.9%
Expected annual return
-5.7%
Base case assumptions: 5.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
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)
59.0x
PEG Ratio
n/m
Earnings Yield
1.69%
ROE (TTM)
14.2%
Revenue/Share (TTM)
$30.12
Dividend Yield
0.36%
Debt/Equity
0.27x
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 59.0x combined with a PEG ratio of -3.58 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 (59.0x) against the Electronic Gaming & Multimedia median to assess relative pricing, (2) check the PEG ratio (-3.58) 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 -3.58, calculated by dividing the PE ratio (59.0x) 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 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 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.