Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Electronic Arts Inc. (EA)

Company Dividend Discount ModelIndustry: Electronic Gaming & MultimediaSector: Technology

Valuation Snapshot

Stable Growth$46.23 - $81.76$61.27
Multi-Stage$63.41 - $69.60$66.45
Blended Fair Value$63.86
Current Price$201.70
Upside-68.34%
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$46.23$61.27$81.76
Upside / Downside-77.08%-69.62%-59.47%

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)296.94299.87302.79
Year 2 PV (M)387.78395.46403.22
Year 3 PV (M)467.56481.52495.75
Year 4 PV (M)537.22558.71580.84
Year 5 PV (M)597.64627.67658.90
PV of Terminal Value (M)14,137.0114,847.4515,586.17
Equity Value (M)16,424.1517,210.6818,027.68
Shares Outstanding (M)259.00259.00259.00
Fair Value$63.41$66.45$69.60
Upside / Downside-68.56%-67.05%-65.49%

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