Taking Stock of Electronic Arts’ Risk Factors

Electronic Arts (EA) is a worldwide leader in digital interactive entertainment, specifically specializing in developing, marketing, and publishing video games.

Let’s take a look at the company’s financials and understand what has changed in its key risk factors that investors should know. Also, we have utilized TipRanks’ Website Traffic tool to evaluate Electronic Arts’ internet traffic trend. (See Insiders’ Hot Stocks on TipRanks)

Q2 Financial Results

Let’s take a look at Electronic Arts’ financial results for the second quarter of Fiscal Year 2022.

The company reported earnings of $1.02 per share, which increased 62% year-over-year. Revenues increased 58.6% year-over-year to $1.83 billion, driven by strong performances by EA SPORTS’ global football franchise, Apex Legends, and Star Wars: Galaxy of Heroes.

Net bookings surged 103.4% year-over-year to $1.85 billion, driven by robust live services performance.

Electronic Arts Risk Factors

According to the new TipRanks Risk Factors tool, Electronic Arts’ main risk category is Tech & Innovation, which accounts for 34% of the total 29 risks identified. The next two major risk factor contributors are Finance & Corporate and Legal & Regulatory, which stands at 14%, each.

Electronic Arts has added one risk factor under the Production category.

Under the Employment / Personnel sub-category, the company said, “Attracting, managing and retaining our talent is critical to our success.”

Electronic Arts emphasizes the importance of competent workers in the company’s success. Employees that are well-trained and skilled, according to the corporation, are essential for the production and maintenance of the company’s goods and services. Electronic Arts also highlights that the company’s image, as well as its ability to develop and operate the business, maybe threatened if it is unable to provide an equal and safe workplace for its employees.

On a brighter note, the overall sector average for the Finance & Corporate risk factor is 36.6%, higher than the average risks in that category for Electronic Arts, which is 13.8%.

Web Traffic Details

During the fiscal third quarter, the total unique visitors to the company’s website from all devices have climbed by 27% on a year-to-date (YTD) basis and are down 10.8% on a quarter-to-date (QTD) basis.

However, in October, global traffic to the Electronic Arts website reached 93 million, a decrease of 10.8% from the previous month.

Region-wise, the U.S. accounted for the largest share of total user traffic for October, at 36.9%. Meanwhile, 8.3% of the total number of visits came from users in the United Kingdom and 6.9% from Germany.

Wall Street’s Take

Consensus among analysts is a Strong Buy based on 11 Buy ratings and two Hold ratings in the last three months. The average EA price target is $174.45, reflecting a potential 12-month upside of 20.8% from current levels.

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