Will Electronic Arts Make a Comeback?

December 26, 2012

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Electronic Arts is strong. The balance sheet is also healthy.

	Debt-To-Equity	Cash	Long-Term Debt
EA	.25	$1.32 Billion	$549.00 Million
ATVI	0.00	$3.36 Billion	$0
TTWO	.67	$328.28 Million	$325.54 Million

T = Technicals on the Stock Chart Are Weak

The word “weak” is actually a little too strong in this case. Electronic Arts has been performing just fine over the past three months. On a three-year basis, Electronic Arts has underperformed Activision Blizzard (NASDAQ:ATVI) and Take-Two Interactive Software (NASDAQ:TTWO).

	1 Month	Year-To-Date	1 Year	3 Year
EA	-.57%	-32.57%	-31.26%	-18.26%
ATVI	-6.17%	-12.31%	-9.21%	2.27%
TTWO	-7.72%	-16.24%	-16.05%	19.47%

At $13.89, Electronic Arts is currently trading above all its averages.

50-Day SMA	13.83
100-Day SMA	13.47
200-Day SMA	13.84

E = Earnings Have Improved

While revenue has been somewhat unpredictable over the past five years, earnings have seen a steady improvement since 2009.

	2008	2009	2010	2011	2012
Revenue ($)in billions	3.67	4.21	3.65	3.59	4.14
Diluted EPS ($)	-1.45	-3.40	-2.08	-.84	.23

When we look at last quarter on a YoY basis, we see a decrease in revenue and earnings.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in billions	715.00	1.06B	1.37B	955.00	711.00
Diluted EPS ($)	-1.03	-.62	1.22	.63	-1.21

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