Benzinga - by Benzinga Insights, Benzinga Staff Writer.
Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Electronic Arts (NASDAQ:EA) in comparison to its major competitors within the Entertainment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Electronic Arts Background EA is one of the world's largest third-party video game publishers and has transitioned from a console-based video game publisher to the one of the largest publishers on consoles, PC, and mobile. The firm owns number of large franchises, including Madden, EA Sports FC, Battlefield, Apex Legends, Mass Effect, Dragon's Age, and Need for Speed.
| Electronic Arts Inc | 38.20 | 4.57 | 4.51 | 5.5% | $0.63 | $1.56 | 8.89% |
| NetEase Inc | 20.19 | 4.47 | 5.24 | 7.4% | $6.72 | $14.38 | 3.68% |
| Sea Ltd | 89.87 | 3.53 | 1.84 | 5.1% | $0.4 | $1.45 | 5.2% |
| DouYu International Holdings Ltd | 33.19 | 0.31 | 0.33 | 0.1% | $-0.01 | $0.19 | -24.06% |
| iHuman Inc | 5.79 | 1.10 | 0.98 | 4.98% | $0.04 | $0.17 | 4.5% |
| Average | 37.26 | 2.35 | 2.1 | 4.39% | $1.79 | $4.05 | -2.67% |
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.dividend-frequency { font-size: 12px; color: #6c757d; } Through an analysis of Electronic Arts, we can infer the following trends:
- The Price to Earnings ratio of 38.2 for this company is 1.03x above the industry average, indicating a premium valuation associated with the stock.
- It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 4.57 which exceeds the industry average by 1.94x.
- With a relatively high Price to Sales ratio of 4.51, which is 2.15x the industry average, the stock might be considered overvalued based on sales performance.
- With a Return on Equity (ROE) of 5.5% that is 1.11% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
- The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $630 Million is 0.35x below the industry average, suggesting potential lower profitability or financial challenges.
- With lower gross profit of $1.56 Billion, which indicates 0.39x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 8.89%, outperforming the industry average of -2.67%.
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Electronic Arts in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
- When compared to its top 4 peers, Electronic Arts has a moderate debt-to-equity ratio of 0.27.
- This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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