Why Electronic Arts Inc. (NASDAQ:EA) Stock Is Gaining Today

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By mmejia on July 22, 2014 Technology & Software

Gaming world continues to flourish and keep its audience interested; this has done great for Electronic Arts Inc. (NASDAQ:EA) shares. Sales of the renowned game, “Titanfall”, have increased Electronic Arts Inc. (NASDAQ:EA) shares by 3.24%. The sales are going so great that according to Wedbush Securities, the game sales may just beat the expected estimates when it records its results for the first quarter.

Wedbush also added that the target price of $43, the repeated “outperform” ranking and the World Cup’s high TV rating were instrumental in increasing the video game “2014 World Cup: Brazil” average sales which was receiving average reviews.
On a separate note, Electronic Arts Inc. (NASDAQ:EA) has been rated by the TheStreet Ratings Team as a “Buy” with a B- ranking. According to the TheStreet Ratings Electronic Arts Inc. (NASDAQ:EA) has been given a BUY rating. The reason given by TheStreet for this rating was mainly due to a few strengths exhibited by Electronic Arts Inc. (NASDAQ:EA) which according to TheStreet overshadows its weaknesses. This dominance of strengths will allow an improved performance chance to the investors as compared to other stocks covered by TheStreet. Electronic Arts Inc. (NASDAQ:EA) strengths are in more than one areas that include net income increase, impressive price performance of the stock, a commanding financial position that has good enough levels of debts by usual standards, profit margins that continue to expand and an extremely decent cash flow that comes from its different operations. All these aspects help to overlook Electronic Arts Inc. (NASDAQ:EA)’s relatively disappointing equity return.

According to TheStreet Ratings Team’s analysis:

Revenue growth and other encouraging elements are being recognized by investors which are similar to elements in the report. A significant increase of 50.00% in the last year has been indicated by company shares. This increase is bigger than the S&P 500 Index’s. The truth is that, in a major bear market, any stock may fall in the future. Nonetheless, stock should continuously increase even though it may have received gains over the previous year, in most other settings.
Gross revenue growth has risen to 13.6%, increasing from $323.00 million to $367.00 million, as compared to the same quarter in the previous year and surpassed the average of the software industry and S&P 500’s.
EA’s successful managing of debt levels shows a low of 0.24 debt-to-equity ratio which is less than the industry average, while retaining a sufficient 1.13 quick ratio. This shows it can circumvent short-term money issues.
ELECTRONIC ARTS INC’s gross profit margin has shown a significant increase reaching 82.24% as compared to the same quarter of the year before. Similarly, its net profit margin comes in at 32.68% which is more than the industry average
ELECTRONIC ARTS INC has shown an increase of 20.60% or $281.00 million in the net operating money flow as compared to the same quarter of the previous year. Consequently, there is a 10.73% average cash flow growth rate indicating it has exceeded the industry average.