Definitive Analysis
Definitive Analysis

Financial Statements

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Ticker

Industry

Sector

Electronic Arts Inc. (EA)

Company Dividend Discount ModelIndustry: Electronic Gaming & MultimediaSector: Technology

Valuation Snapshot

Stable Growth$46.18 - $81.62$61.19
Multi-Stage$63.31 - $69.49$66.34
Blended Fair Value$63.77
Current Price$201.70
Upside-68.39%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS0.00%0.00%0.770.790.810.750.380.000.000.000.000.00
YoY Growth---2.93%-2.38%8.81%96.94%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--0.48%0.58%0.63%0.61%0.26%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)885.00
(-) Cash Dividends Paid (M)194.00
(=) Cash Retained (M)691.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)177.00110.6366.38
Cash Retained (M)691.00691.00691.00
(-) Cash Required (M)-177.00-110.63-66.38
(=) Excess Retained (M)514.00580.38624.63
(/) Shares Outstanding (M)259.00259.00259.00
(=) Excess Retained per Share1.982.242.41
LTM Dividend per Share0.750.750.75
(+) Excess Retained per Share1.982.242.41
(=) Adjusted Dividend2.732.993.16
WACC / Discount Rate7.48%7.48%7.48%
Growth Rate1.47%2.47%3.47%
Fair Value$46.18$61.19$81.62
Upside / Downside-77.11%-69.66%-59.53%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)885.00906.90929.35952.35975.921,000.071,030.08
Payout Ratio21.92%35.54%49.15%62.77%76.38%90.00%92.50%
Projected Dividends (M)194.00322.28456.80597.77745.45900.07952.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.48%7.48%7.48%
Growth Rate1.47%2.47%3.47%
Year 1 PV (M)296.92299.85302.78
Year 2 PV (M)387.74395.42403.17
Year 3 PV (M)467.47481.43495.66
Year 4 PV (M)537.08558.57580.69
Year 5 PV (M)597.45627.47658.69
PV of Terminal Value (M)14,111.1614,820.3015,557.67
Equity Value (M)16,397.8217,183.0317,998.66
Shares Outstanding (M)259.00259.00259.00
Fair Value$63.31$66.34$69.49
Upside / Downside-68.61%-67.11%-65.55%

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