Vladyslav Koptiev @AtlasCapital: "$EA Over the last year,..."

Malta

$EA (Electronic Arts Inc) Over the last year, Electronic Arts' stock did what it had to: up ~20%, right in line with the S&P 500’s 20%. Solid. But zoom out and the picture changes. Over three years, EA only managed +10% while the index ran nearly double at +19.4%. Stretch that to five years, and it’s even clearer: EA +7% vs. S&P +16.2%. That’s not a “growth stock” chart — that’s a steady compounder struggling to keep pace with the broader market’s tech-heavy winners. So why the lag? Simple: growth. The big names in gaming (and tech more broadly) found ways to ride waves like mobile, subscriptions, or pandemic demand spikes. EA? It’s been steady, console-heavy, and sports-franchise centric. Investors rewarded fast movers, while EA got priced as the “dependable but not explosive” name. Think of it as the dividend-paying veteran in a league filled with flashy rookies. Here’s the thing though: fundamentals don’t lie. EA has posted a 10-year median ROIC of 16%. That’s solid, and it screams “narrow moat” — they’ve got franchises (FIFA/EA Sports FC, Madden, The Sims) that keep players locked in year after year. On leverage, the debt-to-equity ratio sits at ~32%, comfortably manageable. Nothing to worry about there. Cash flow? Rock steady. EA spits out predictable free cash flow thanks to its annualized sports titles and live services. The catch is that the free cash flow yield is just ~4% today — not exactly juicy. In other words, you’re paying up for stability, not value. Growth has been the sticking point. Historically, revenues grew ~5% per year, and the forward outlook is about the same — mid-single digits. That’s fine, but when the industry average is running higher, “fine” doesn’t win market share. Compared to Activision Blizzard (now under Microsoft) or Take-Two, EA looks conservative on the growth front. But don’t count them out. Market share in sports gaming is untouchable — FIFA (rebranding to EA Sports FC) dominates globally, Madden owns the NFL niche, and NBA Live (despite its struggles) still lurks in the portfolio. Add Apex Legends (still a cash generator in battle royale) and The Sims (quietly a monster in simulation), and you’ve got diversified revenue streams across genres. Sports + live services are the bedrock, and they deliver recurring revenue — a Wall Street favorite. Recent headlines? All eyes are on the FIFA-to-FC rebrand. Management has spun it as a growth unlock rather than a risk, with more flexibility around partnerships and monetization. Guidance is steady: stable revenue, resilient margins, nothing flashy but nothing scary. EA isn’t trying to reinvent itself overnight; it’s sticking to what works. And valuation? Our fair value estimate lands at $ 150 per share. The stock trades around $ 172, which means you’re paying a premium for safety, brand power, and cash flows. It’s the definition of a “quality compounder” — not cheap, not a rocket ship, but dependable. 𝗩𝗲𝗿𝗱𝗶𝗰𝘁: shares overvalued. $SPX500 $VOO (Vanguard S&P 500 ETF) $NSDQ100

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Electronic Arts Inc

SPX500

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Vanguard S&P 500 ETF

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