Topic: How To Invest

Power Growth Investor Hotline – Friday, August 4, 2023

Article Excerpt

ELECTRONIC ARTS INC., $122.59 (symbol EA on Nasdaq), is a buy for aggressive investors. The company is a developer of video games for play on consoles, PCs, and mobile devices. Its hugely popular game franchises include Madden NFL, The Sims, Need for Speed, Battlefield, and Apex Legends. In the quarter ended June 30, 2023, Electronic Arts’ revenues increased 8.9%, to $1.92 billion from $1.77 billion a year earlier. The company made $1.10 a share. That was up sharply from $0.32. It also beat the consensus estimate of $1.01. The videogame industry is risky because of fickle consumer tastes and the fact that games can quickly fall out of favour. It’s also difficult to develop games for many different platforms—and that frequently delays their launch. But Electronic Arts has the financial strength—including $2.6 billion in cash—to maintain its very high spending (31% of sales) on research and continue developing new games. Meanwhile, recent acquisitions have let it catch up in the mobile games segment…