Electronic Arts Inc.

Communication ServicesElectronic Gaming & MultimediaNASDAQ

$200.22

Market Cap: $50.11B

Electronic Arts Inc. (EA) Valuation Summary

Updated Apr 28, 2026 22:23

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$65.10 – $253.74	$101.78	-49.7%
Growth Exit 10Y	$75.56 – $283.06	$116.33	-42.6%
EBITDA Exit 5Y	$198.17 – $294.56	$242.71	+19.8%
EBITDA Exit 10Y	$183.95 – $315.57	$241.17	+19.1%
▸ Trading Multiples
P/E	$140.59 – $348.17	$294.50	+45.4%
EV/EBITDA	$180.35 – $521.06	$317.19	+56.6%
EV/Revenue	$154.42 – $406.00	$288.52	+42.5%
▸ PEG
PEG Fair Value	$214.75 – $214.75	$214.75	+6.0%
▸ Earnings Power Value
Earnings Power Value	$48.13 – $72.76	$57.95	-71.4%
▸ Dividend Discount
Dividend Discount	$16.71 – $42.47	$25.52	-87.4%

Valuation History

DCF Analysis

Fair Value

$101.78

Market Price

$200.22

Upside / Downside

-49.2%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Electronic Arts Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 9.2% to 8.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 22, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $101.78 per share, suggesting EA is overvalued by 49.2% at the current price of $200.22.

FCFF Present Value Calculation

WACC

7.40%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,634	1,693	1,781	1,945	2,103	2,156
(−) Net Interest	64	67	70	77	83	85
(+) D&A	188	206	213	219	231	237
EBITDA	1,886	1,966	2,065	2,241	2,417	2,478

(−) Tax	439	455	478	522	565	579
(−) CapEx	216	224	236	257	278	285
(−) ΔWC	345	33	50	92	89	92
Free Cash Flow (FCFF)	886	1,254	1,301	1,369	1,485	1,522

Terminal Value						31,061
WACC / Discount Rate	7.4%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	855	1,127	1,088	1,066	1,077	21,737

Enterprise Value	26,951
Projection Period	5,214	19.3%
Terminal Value	21,737	80.7%

(−) Current Net Debt	82

Equity Value	26,869
(/) Outstanding Shares	264

Fair Price	$101.78

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.4%	$134	$151	$173	$205	$254
6.4%	$106	$116	$128	$144	$166
7.4%	$88	$94	$102	$111	$123
8.4%	$75	$79	$84	$90	$98
9.4%	$65	$68	$72	$76	$81

Current price: $200.22. Green = undervalued, Red = overvalued.

Fair Value

$116.33

Market Price

$200.22

Upside / Downside

-41.9%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Electronic Arts Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 9.2% to 3.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 22, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (66% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $116.33 per share, suggesting EA is overvalued by 41.9% at the current price of $200.22.

FCFF Present Value Calculation

WACC

7.40%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,634	1,693	1,781	1,945	2,103	2,242	2,374	2,496	2,607	2,704	2,771
(−) Net Interest	64	67	70	77	83	88	94	98	103	107	109
(+) D&A	188	206	213	219	231	242	258	276	295	313	321
EBITDA	1,886	1,966	2,065	2,241	2,417	2,573	2,726	2,871	3,005	3,123	3,201

(−) Tax	439	455	478	522	565	602	637	670	700	726	744
(−) CapEx	216	224	236	257	278	297	314	330	345	358	367
(−) ΔWC	345	33	50	92	89	78	74	69	62	54	56
Free Cash Flow (FCFF)	886	1,254	1,301	1,369	1,485	1,596	1,700	1,801	1,898	1,985	2,034

Terminal Value											41,522
WACC / Discount Rate	7.4%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	855	1,127	1,088	1,066	1,077	1,078	1,069	1,055	1,034	1,007	20,335

Enterprise Value	30,792
Projection Period	10,457	34.0%
Terminal Value	20,335	66.0%

(−) Current Net Debt	82

Equity Value	30,710
(/) Outstanding Shares	264

Fair Price	$116.33

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.4%	$160	$177	$200	$233	$283
6.4%	$126	$135	$147	$163	$184
7.4%	$103	$109	$116	$125	$136
8.4%	$87	$91	$96	$101	$108
9.4%	$76	$78	$81	$85	$89

Current price: $200.22. Green = undervalued, Red = overvalued.

Fair Value

$242.68

Market Price

$200.22

Upside / Downside

+21.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Electronic Arts Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 9.2% to 8.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 22, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (92% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 34.0x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $242.71 per share, suggesting EA is undervalued by 21.2% at the current price of $200.22.

FCFF Present Value Calculation

WACC

7.40%

3% – 20%

EV/EBITDA Exit Multiple

33.99x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,634	1,693	1,781	1,945	2,103	2,156
(−) Net Interest	64	67	70	77	83	85
(+) D&A	188	206	213	219	231	237
EBITDA	1,886	1,966	2,065	2,241	2,417	2,478

(−) Tax	439	455	478	522	565	—
(−) CapEx	216	224	236	257	278	—
(−) ΔWC	345	33	50	92	89	—
Free Cash Flow (FCF)	886	1,254	1,301	1,369	1,485	—

Peers' EBITDA Multiple						34.0x
Terminal Value						84,216
WACC / Discount Rate	7.40%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	855	1,127	1,088	1,066	1,077	58,936

Enterprise Value	64,150
Projection Period	5,214	8.1%
Terminal Value	58,936	91.9%

(−) Current Net Debt	82
Equity Value	64,068
(÷) Outstanding Shares	264M
Fair Price	$243	+21.2%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	30.0x	32.0x	34.0x	36.0x	38.0x
5.4%	$237	$251	$266	$280	$295
6.4%	$226	$240	$254	$268	$281
7.4%	$216	$230	$243	$256	$269
8.4%	$207	$220	$232	$245	$257
9.4%	$198	$210	$222	$234	$246

Current price: $200.22. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$241.15

Market Price

$200.22

Upside / Downside

+20.4%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Electronic Arts Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 9.2% to 3.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 32, DPO 22, DIO 60). At a 7.4% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 34.0x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $241.17 per share, suggesting EA is undervalued by 20.5% at the current price of $200.22.

FCFF Present Value Calculation

WACC

7.40%

3% – 20%

EV/EBITDA Exit Multiple

33.99x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,634	1,693	1,781	1,945	2,103	2,242	2,374	2,496	2,607	2,704	2,771
(−) Net Interest	64	67	70	77	83	88	94	98	103	107	109
(+) D&A	188	206	213	219	231	242	258	276	295	313	321
EBITDA	1,886	1,966	2,065	2,241	2,417	2,573	2,726	2,871	3,005	3,123	3,201

(−) Tax	439	455	478	522	565	602	637	670	700	726	—
(−) CapEx	216	224	236	257	278	297	314	330	345	358	—
(−) ΔWC	345	33	50	92	89	78	74	69	62	54	—
Free Cash Flow (FCF)	886	1,254	1,301	1,369	1,485	1,596	1,700	1,801	1,898	1,985	—

Peers' EBITDA Multiple											34.0x
Terminal Value											108,805
WACC / Discount Rate	7.40%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	855	1,127	1,088	1,066	1,077	1,078	1,069	1,055	1,034	1,007	53,288

Enterprise Value	63,744
Projection Period	10,457	16.4%
Terminal Value	53,288	83.6%

(−) Current Net Debt	82
Equity Value	63,662
(÷) Outstanding Shares	264M
Fair Price	$241	+20.4%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	30.0x	32.0x	34.0x	36.0x	38.0x
5.4%	$258	$273	$287	$301	$316
6.4%	$237	$250	$263	$276	$289
7.4%	$217	$229	$241	$253	$265
8.4%	$200	$211	$222	$232	$243
9.4%	$184	$194	$204	$214	$223

Current price: $200.22. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$276.13

Market Price

$200.22

Upside / Downside

+37.9%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Electronic Arts Inc. (EA) has a fair value of $276.13 based on 9 comparable companies in the Electronic Gaming & Multimedia industry.

P/E Valuation — Electronic Gaming & Multimedia

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Electronic Arts Inc.EA	50,656	57.0x	23.3x
Western Digital CorporationWDC	132,560	76.4x	44.0x
Seagate Technology Holdings plcSTX	126,271	85.5x	44.1x
Monolithic Power Systems, Inc.MPWR	73,877	118.0x	69.8x
Ubiquiti Inc.UI	58,358	82.0x	139.8x
NXP Semiconductors N.V.NXPI	58,200	29.0x	17.7x
Garmin Ltd.GRMN	47,699	28.8x	35.0x
Block, Inc.XYZ	42,251	33.1x	19.3x
Celestica Inc.CLS	41,585	49.6x	94.9x
Fair Isaac CorporationFICO	23,963	38.1x	24.4x
Industry Median		49.6x	44.0x
(*) Profit after tax		887	2,173
Equity Value		44,011	95,711
(/) Outstanding shares		253	253
Fair Price		$174	$378

Selected Fair Value (avg of trailing + forward)

$276.13

+37.9%

Fair Value

$205.88

Market Price

$200.22

Upside / Downside

+2.8%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Electronic Arts Inc. (EA) has a fair value of $205.88 based on 9 comparable companies in the Electronic Gaming & Multimedia industry.

EV/EBITDA Valuation — Electronic Gaming & Multimedia

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Electronic Arts Inc.EA	50,656	40.1x	37.1x
Western Digital CorporationWDC	132,560	69.9x	53.2x
Seagate Technology Holdings plcSTX	126,271	62.7x	49.3x
Monolithic Power Systems, Inc.MPWR	73,877	89.1x	73.5x
Ubiquiti Inc.UI	58,358	68.2x	90.8x
NXP Semiconductors N.V.NXPI	58,200	17.6x	17.2x
Garmin Ltd.GRMN	47,699	22.1x	25.9x
Block, Inc.XYZ	42,251	23.6x	21.5x
Celestica Inc.CLS	41,585	34.0x	44.9x
Fair Isaac CorporationFICO	23,963	28.3x	22.7x
Industry Median		34.0x	44.9x
(*) EBITDA		1,228	1,328
= Enterprise Value		41,745	59,673
(-) Net Debt		-1,379	-1,379
Equity Value		43,124	61,052
(/) Outstanding shares		253	253
Fair Price		$170	$241

Selected Fair Value (avg of trailing + forward)

$205.88

+2.8%

Fair Value

$308.24

Market Price

$200.22

Upside / Downside

+54.0%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Electronic Arts Inc. (EA) has a fair value of $308.24 based on 10 comparable companies in the Electronic Gaming & Multimedia industry.

EV/Revenue Valuation — Electronic Gaming & Multimedia

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Electronic Arts Inc.EA	50,656	6.5x	6.0x
Western Digital CorporationWDC	132,560	14.2x	10.8x
Seagate Technology Holdings plcSTX	126,271	14.4x	11.3x
Monolithic Power Systems, Inc.MPWR	73,877	26.1x	21.5x
Ubiquiti Inc.UI	58,358	22.7x	30.3x
NXP Semiconductors N.V.NXPI	58,200	5.5x	5.3x
Garmin Ltd.GRMN	47,699	6.3x	7.4x
Block, Inc.XYZ	42,251	1.8x	1.6x
Celestica Inc.CLS	41,585	3.3x	4.4x
Take-Two Interactive Software, Inc.TTWO	39,444	7.5x	6.3x
Fair Isaac CorporationFICO	23,963	13.5x	10.8x
Industry Median		10.5x	9.1x
(*) Revenue		7,531	8,146
= Enterprise Value		79,021	74,192
(-) Net Debt		-1,379	-1,379
Equity Value		80,400	75,571
(/) Outstanding shares		253	253
Fair Price		$318	$299

Selected Fair Value (avg of trailing + forward)

$308.24

+54.0%

PEG Fair Value

Fair Value

$214.75

Market Price

$200.22

Upside / Downside

+7.3%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 25.0% plus 0.4% dividend yield, the company has a fair value of $214.75 based on NTM EPS (FY2026) of $8.59. The current PEG ratio is 0.75.

PEG Ratio

0.75Undervalued

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 23.6 ÷ (30.9% + 0.4%) = 0.75

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	30.9%
Dividend Yield	+0.4%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2026)	$8.59
Fair Value	$214.75

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$4.23	—	—
FY2026E	$8.59	+103.1%	14
FY2027E	$9.32	+8.5%	14
FY2028E	$10.09	+8.2%	13
FY2029E	$12.42	+23.1%	3

4Y Forward EPS CAGR: 30.9%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$837.0M	$2.87	—
FY2022	$789.0M	$2.76	-3.8%
FY2023	$802.0M	$2.88	+4.3%
FY2024	$1.3B	$4.68	+62.5%
FY2025	$1.1B	$4.23	-9.6%

4Y Historical EPS CAGR: 10.2%

Earnings Power Value

Fair Value

$57.95

Market Price

$200.22

Upside / Downside

-71.1%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 7.4% and normalized earnings of $1.1B, the company has a fair value of $57.95 per share. The EPV range is $48.13 – $72.76 based on WACC sensitivity (5.9% – 8.9%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,138	1,138	1,138
(/) WACC	8.9%	7.4%	5.9%
Enterprise Value	12,788	15,381	19,291
(-) Net debt	82	82	82
Equity Value	12,706	15,299	19,209
(/) Outstanding shares	264	264	264
Fair Price	$48.13	$57.95	$72.76

Dividend Discount Model

Fair Value

$25.52

Market Price

$200.22

Upside / Downside

-87.3%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 7.6% and projected dividend growth of 15.0%, the fair value is $25.52 per share. The DDM range is $16.71 – $42.47 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.75

Dividend Yield

0.39%

Payout Ratio

17.8%

Dividend Coverage

5.63x

FCF Payout Ratio10.7%

DPS CAGR (4Y)22.4%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.75	17.8%	+0.0%
2024	$0.75	16.1%	-0.2%
2023	$0.76	26.2%	+11.9%
2022	$0.67	24.5%	+101.1%
2021	$0.34	11.7%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.87	15.0%	0.9290	$0.81
2027	$1.00	15.0%	0.8630	$0.86
2028	$1.15	15.0%	0.8017	$0.92
2029	$1.32	15.0%	0.7448	$0.98
2030	$1.52	15.0%	0.6919	$1.05
Terminal Value	$1.55 DPS	2.5%		$20.91

PV of Projected Dividends$4.62

PV of Terminal Value$20.91

Fair Value per Share$25.52

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	13.0%	14.0%	15.0%	15.0%	15.0%
5.6%	$39	$41	$42	$42	$42
6.6%	$29	$31	$32	$32	$32
7.6%	$24	$25	$26	$26	$26
8.6%	$20	$20	$21	$21	$21
9.6%	$17	$17	$18	$18	$18

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.