Electronic Arts (EA): Has 2024’s 40% Share Price Climb Left the Stock Overvalued?

Electronic Arts (EA) shares have quietly ground higher this year, and with the stock now around 40% up year to date, investors are asking whether the move is justified by fundamentals. See our latest analysis for Electronic Arts. That climb has not been a sudden squeeze so much as a steady rerating, with a strong 90 day share price return supporting the year to date surge, while multi year total shareholder returns show momentum has been building rather than fading. If EA’s run has you thinking about what else could be setting up for the next leg higher, this is a good moment to explore high growth tech and AI stocks. With earnings growing faster than revenue and the share price already nudging past Wall Street targets, the key question now is simple: does EA still offer upside for new investors, or has the market fully priced in its future growth? Most Popular Narrative: 0.9% Overvalued With Electronic Arts last closing at $204.20 against a narrative fair value of about $202.36, the story leans toward a fully priced outcome while hinging on specific growth and margin expectations. The analysts have a consensus price target of $175.533 for Electronic Arts based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $210.0, and the most bearish reporting a price target of just $148.0. Read the complete narrative. Want to see what justifies a valuation near a record take private price, yet still below the most optimistic view? The narrative leans on steady growth, rising margins, and a punchy future earnings multiple that could surprise you. Curious how those pieces fit together into that fair value estimate? Dive in to unpack the full playbook behind this call. Result: Fair Value of $202.36 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, lingering weakness in Apex Legends and softer consumer spending could derail the expected live services momentum that underpins that seemingly full valuation. Find out about the key risks to this Electronic Arts narrative. Build Your Own Electronic Arts Narrative If you see the setup differently or want to stress test the assumptions yourself, you can spin up a custom view in just a few minutes: Do it your way. A great starting point for your Electronic Arts research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? Before you move on, lock in your next opportunity by using the Simply Wall Street Screener to target focused, data driven ideas that others are still overlooking. Capture high potential names early by scanning these 3633 penny stocks with strong financials that already show solid balance sheets and improving fundamentals before the wider market catches on. Ride powerful innovation trends by zeroing in on these 25 AI penny stocks that pair cutting edge technology with revenue traction rather than just hype. Build a resilient income engine by filtering for these 13 dividend stocks with yields > 3% that combine attractive yields with the financial strength to sustain and grow payouts. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech