Intrinsic value of Electronic Arts - EA

Previous Close

$119.25

  Intrinsic Value

$246.53

stock screener

  Rating & Target

str. buy

+107%

  Value-price divergence*

+44%

Previous close

$119.25

 
Intrinsic value

$246.53

 
Up/down potential

+107%

 
Rating

str. buy

 
Value-price divergence*

+44%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 36.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.21
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
  5.55
Revenue, $m
  4,845
  5,654
  6,532
  7,478
  8,490
  9,566
  10,705
  11,906
  13,167
  14,489
  15,870
  17,311
  18,812
  20,374
  21,999
  23,688
  25,443
  27,266
  29,162
  31,132
  33,181
  35,312
  37,529
  39,838
  42,243
  44,750
  47,363
  50,089
  52,934
  55,905
  59,009
Variable operating expenses, $m
 
  1,521
  1,730
  1,956
  2,198
  2,455
  2,727
  3,013
  3,315
  3,630
  3,960
  4,133
  4,492
  4,865
  5,253
  5,656
  6,075
  6,510
  6,963
  7,433
  7,922
  8,431
  8,961
  9,512
  10,086
  10,685
  11,309
  11,960
  12,639
  13,348
  14,089
Fixed operating expenses, $m
 
  2,410
  2,470
  2,532
  2,595
  2,660
  2,726
  2,795
  2,864
  2,936
  3,009
  3,085
  3,162
  3,241
  3,322
  3,405
  3,490
  3,577
  3,667
  3,758
  3,852
  3,949
  4,047
  4,149
  4,252
  4,359
  4,468
  4,579
  4,694
  4,811
  4,931
Total operating expenses, $m
  3,621
  3,931
  4,200
  4,488
  4,793
  5,115
  5,453
  5,808
  6,179
  6,566
  6,969
  7,218
  7,654
  8,106
  8,575
  9,061
  9,565
  10,087
  10,630
  11,191
  11,774
  12,380
  13,008
  13,661
  14,338
  15,044
  15,777
  16,539
  17,333
  18,159
  19,020
Operating income, $m
  1,224
  1,724
  2,332
  2,990
  3,697
  4,451
  5,252
  6,098
  6,988
  7,923
  8,901
  10,093
  11,159
  12,269
  13,424
  14,627
  15,878
  17,179
  18,532
  19,940
  21,406
  22,932
  24,521
  26,178
  27,905
  29,706
  31,587
  33,550
  35,602
  37,746
  39,988
EBITDA, $m
  1,396
  1,920
  2,532
  3,195
  3,906
  4,665
  5,471
  6,323
  7,219
  8,159
  9,144
  10,172
  11,244
  12,362
  13,525
  14,735
  15,994
  17,303
  18,665
  20,082
  21,557
  23,093
  24,692
  26,359
  28,097
  29,910
  31,803
  33,779
  35,843
  38,001
  40,257
Interest expense (income), $m
  0
  35
  50
  72
  96
  122
  149
  178
  209
  241
  274
  309
  346
  384
  424
  465
  508
  552
  599
  647
  697
  749
  803
  859
  918
  979
  1,042
  1,109
  1,178
  1,250
  1,326
Earnings before tax, $m
  1,210
  1,689
  2,282
  2,917
  3,600
  4,329
  5,102
  5,919
  6,779
  7,682
  8,626
  9,783
  10,813
  11,885
  13,001
  14,162
  15,370
  16,626
  17,933
  19,293
  20,709
  22,183
  23,718
  25,318
  26,987
  28,727
  30,544
  32,441
  34,424
  36,496
  38,662
Tax expense, $m
  243
  456
  616
  788
  972
  1,169
  1,378
  1,598
  1,830
  2,074
  2,329
  2,642
  2,919
  3,209
  3,510
  3,824
  4,150
  4,489
  4,842
  5,209
  5,591
  5,989
  6,404
  6,836
  7,286
  7,756
  8,247
  8,759
  9,294
  9,854
  10,439
Net income, $m
  967
  1,233
  1,666
  2,130
  2,628
  3,160
  3,725
  4,321
  4,949
  5,608
  6,297
  7,142
  7,893
  8,676
  9,490
  10,338
  11,220
  12,137
  13,091
  14,084
  15,118
  16,193
  17,314
  18,482
  19,700
  20,971
  22,297
  23,682
  25,129
  26,642
  28,223

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,532
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,718
  4,556
  5,264
  6,026
  6,841
  7,708
  8,626
  9,594
  10,610
  11,675
  12,788
  13,949
  15,159
  16,418
  17,727
  19,088
  20,502
  21,971
  23,499
  25,086
  26,737
  28,454
  30,241
  32,102
  34,040
  36,059
  38,165
  40,362
  42,655
  45,049
  47,549
Adjusted assets (=assets-cash), $m
  3,186
  4,556
  5,264
  6,026
  6,841
  7,708
  8,626
  9,594
  10,610
  11,675
  12,788
  13,949
  15,159
  16,418
  17,727
  19,088
  20,502
  21,971
  23,499
  25,086
  26,737
  28,454
  30,241
  32,102
  34,040
  36,059
  38,165
  40,362
  42,655
  45,049
  47,549
Revenue / Adjusted assets
  1.521
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
  1.241
Average production assets, $m
  252
  294
  340
  389
  441
  497
  557
  619
  685
  753
  825
  900
  978
  1,059
  1,144
  1,232
  1,323
  1,418
  1,516
  1,619
  1,725
  1,836
  1,952
  2,072
  2,197
  2,327
  2,463
  2,605
  2,753
  2,907
  3,068
Working capital, $m
  2,784
  -565
  -653
  -748
  -849
  -957
  -1,070
  -1,191
  -1,317
  -1,449
  -1,587
  -1,731
  -1,881
  -2,037
  -2,200
  -2,369
  -2,544
  -2,727
  -2,916
  -3,113
  -3,318
  -3,531
  -3,753
  -3,984
  -4,224
  -4,475
  -4,736
  -5,009
  -5,293
  -5,591
  -5,901
Total debt, $m
  990
  1,432
  2,069
  2,755
  3,489
  4,269
  5,095
  5,966
  6,881
  7,840
  8,841
  9,886
  10,975
  12,108
  13,286
  14,511
  15,784
  17,106
  18,481
  19,910
  21,395
  22,941
  24,549
  26,224
  27,968
  29,785
  31,681
  33,658
  35,721
  37,876
  40,126
Total liabilities, $m
  3,658
  4,100
  4,737
  5,423
  6,157
  6,937
  7,763
  8,634
  9,549
  10,508
  11,509
  12,554
  13,643
  14,776
  15,954
  17,179
  18,452
  19,774
  21,149
  22,578
  24,063
  25,609
  27,217
  28,892
  30,636
  32,453
  34,349
  36,326
  38,389
  40,544
  42,794
Total equity, $m
  4,060
  456
  526
  603
  684
  771
  863
  959
  1,061
  1,168
  1,279
  1,395
  1,516
  1,642
  1,773
  1,909
  2,050
  2,197
  2,350
  2,509
  2,674
  2,845
  3,024
  3,210
  3,404
  3,606
  3,817
  4,036
  4,265
  4,505
  4,755
Total liabilities and equity, $m
  7,718
  4,556
  5,263
  6,026
  6,841
  7,708
  8,626
  9,593
  10,610
  11,676
  12,788
  13,949
  15,159
  16,418
  17,727
  19,088
  20,502
  21,971
  23,499
  25,087
  26,737
  28,454
  30,241
  32,102
  34,040
  36,059
  38,166
  40,362
  42,654
  45,049
  47,549
Debt-to-equity ratio
  0.244
  3.140
  3.930
  4.570
  5.100
  5.540
  5.910
  6.220
  6.490
  6.710
  6.910
  7.090
  7.240
  7.370
  7.490
  7.600
  7.700
  7.790
  7.860
  7.940
  8.000
  8.060
  8.120
  8.170
  8.220
  8.260
  8.300
  8.340
  8.370
  8.410
  8.440
Adjusted equity ratio
  -0.148
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  967
  1,233
  1,666
  2,130
  2,628
  3,160
  3,725
  4,321
  4,949
  5,608
  6,297
  7,142
  7,893
  8,676
  9,490
  10,338
  11,220
  12,137
  13,091
  14,084
  15,118
  16,193
  17,314
  18,482
  19,700
  20,971
  22,297
  23,682
  25,129
  26,642
  28,223
Depreciation, amort., depletion, $m
  172
  196
  200
  205
  209
  214
  220
  225
  231
  237
  243
  79
  86
  93
  100
  108
  116
  124
  133
  142
  151
  161
  171
  182
  193
  204
  216
  228
  241
  255
  269
Funds from operations, $m
  1,331
  1,429
  1,866
  2,335
  2,838
  3,375
  3,944
  4,546
  5,180
  5,844
  6,540
  7,221
  7,979
  8,769
  9,591
  10,446
  11,336
  12,262
  13,224
  14,226
  15,269
  16,355
  17,485
  18,664
  19,893
  21,175
  22,513
  23,911
  25,371
  26,897
  28,493
Change in working capital, $m
  -52
  -81
  -88
  -95
  -101
  -108
  -114
  -120
  -126
  -132
  -138
  -144
  -150
  -156
  -162
  -169
  -176
  -182
  -190
  -197
  -205
  -213
  -222
  -231
  -241
  -251
  -261
  -273
  -285
  -297
  -310
Cash from operations, $m
  1,383
  1,510
  1,954
  2,429
  2,939
  3,482
  4,058
  4,666
  5,306
  5,977
  6,678
  7,365
  8,129
  8,925
  9,753
  10,615
  11,512
  12,444
  13,414
  14,423
  15,474
  16,568
  17,707
  18,895
  20,134
  21,426
  22,775
  24,183
  25,655
  27,194
  28,803
Maintenance CAPEX, $m
  0
  -22
  -26
  -30
  -34
  -39
  -44
  -49
  -54
  -60
  -66
  -72
  -79
  -86
  -93
  -100
  -108
  -116
  -124
  -133
  -142
  -151
  -161
  -171
  -182
  -193
  -204
  -216
  -228
  -241
  -255
New CAPEX, $m
  -123
  -42
  -46
  -49
  -53
  -56
  -59
  -62
  -66
  -69
  -72
  -75
  -78
  -81
  -84
  -88
  -91
  -95
  -99
  -102
  -107
  -111
  -115
  -120
  -125
  -130
  -136
  -142
  -148
  -154
  -161
Cash from investing activities, $m
  -759
  -64
  -72
  -79
  -87
  -95
  -103
  -111
  -120
  -129
  -138
  -147
  -157
  -167
  -177
  -188
  -199
  -211
  -223
  -235
  -249
  -262
  -276
  -291
  -307
  -323
  -340
  -358
  -376
  -395
  -416
Free cash flow, $m
  624
  1,446
  1,882
  2,350
  2,852
  3,387
  3,955
  4,555
  5,186
  5,848
  6,540
  7,218
  7,972
  8,758
  9,576
  10,427
  11,312
  12,233
  13,191
  14,188
  15,225
  16,306
  17,431
  18,604
  19,827
  21,103
  22,435
  23,826
  25,279
  26,798
  28,387
Issuance/(repayment) of debt, $m
  -163
  442
  637
  686
  734
  780
  826
  871
  915
  958
  1,002
  1,045
  1,089
  1,133
  1,178
  1,225
  1,273
  1,323
  1,375
  1,429
  1,486
  1,545
  1,608
  1,674
  1,744
  1,818
  1,895
  1,977
  2,063
  2,155
  2,251
Issuance/(repurchase) of shares, $m
  -436
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -534
  442
  637
  686
  734
  780
  826
  871
  915
  958
  1,002
  1,045
  1,089
  1,133
  1,178
  1,225
  1,273
  1,323
  1,375
  1,429
  1,486
  1,545
  1,608
  1,674
  1,744
  1,818
  1,895
  1,977
  2,063
  2,155
  2,251
Total cash flow (excl. dividends), $m
  72
  1,889
  2,519
  3,036
  3,586
  4,168
  4,781
  5,426
  6,101
  6,806
  7,542
  8,263
  9,061
  9,891
  10,754
  11,652
  12,585
  13,556
  14,566
  15,617
  16,711
  17,851
  19,039
  20,278
  21,571
  22,920
  24,330
  25,803
  27,342
  28,952
  30,637
Retained Cash Flow (-), $m
  -664
  -208
  -71
  -76
  -82
  -87
  -92
  -97
  -102
  -106
  -111
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -153
  -159
  -165
  -172
  -179
  -186
  -194
  -202
  -211
  -220
  -229
  -239
  -250
Prev. year cash balance distribution, $m
 
  3,813
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,493
  2,449
  2,960
  3,504
  4,081
  4,690
  5,329
  5,999
  6,700
  7,431
  8,147
  8,940
  9,765
  10,623
  11,516
  12,444
  13,409
  14,413
  15,458
  16,546
  17,679
  18,860
  20,092
  21,377
  22,718
  24,119
  25,583
  27,113
  28,713
  30,387
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  5,267
  2,242
  2,576
  2,885
  3,163
  3,403
  3,600
  3,750
  3,849
  3,896
  3,869
  3,815
  3,713
  3,566
  3,381
  3,162
  2,918
  2,654
  2,380
  2,102
  1,829
  1,565
  1,317
  1,089
  884
  704
  549
  419
  313
  229
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Electronic Arts Inc. develops, markets, publishes, and distributes games, content, and services for consoles, personal computers, mobile phones, and tablets worldwide. It develops and publishes digital interactive entertainment games primarily under the FIFA, Madden NFL, Star Wars, Battlefield, The Sims, Need for Speed, Mass Effect, Dragon Age, Plants vs. Zombies, and Titanfall brand names. The company also offers casual games, such as cards, puzzles, and word games through its Pogo online service. Electronic Arts Inc. was founded in 1982 and is headquartered in Redwood City, California.

FINANCIAL RATIOS  of  Electronic Arts (EA)

Valuation Ratios
P/E Ratio 37.9
Price to Sales 7.6
Price to Book 9
Price to Tangible Book
Price to Cash Flow 26.5
Price to Free Cash Flow 29.1
Growth Rates
Sales Growth Rate 10.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 32.3%
Cap. Spend. - 3 Yr. Gr. Rate 4.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 24.4%
Total Debt to Equity 24.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 13.1%
Ret/ On Assets - 3 Yr. Avg. 15.2%
Return On Total Capital 20.2%
Ret/ On T. Cap. - 3 Yr. Avg. 24.8%
Return On Equity 25.9%
Return On Equity - 3 Yr. Avg. 31.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 73.2%
Gross Margin - 3 Yr. Avg. 70.3%
EBITDA Margin 28.5%
EBITDA Margin - 3 Yr. Avg. 26.2%
Operating Margin 25.3%
Oper. Margin - 3 Yr. Avg. 22.2%
Pre-Tax Margin 25%
Pre-Tax Margin - 3 Yr. Avg. 21.8%
Net Profit Margin 20%
Net Profit Margin - 3 Yr. Avg. 21.9%
Effective Tax Rate 20.1%
Eff/ Tax Rate - 3 Yr. Avg. -2.1%
Payout Ratio 0%

EA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EA stock intrinsic value calculation we used $4845 million for the last fiscal year's total revenue generated by Electronic Arts. The default revenue input number comes from 2017 income statement of Electronic Arts. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EA stock valuation model: a) initial revenue growth rate of 16.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for EA is calculated based on our internal credit rating of Electronic Arts, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Electronic Arts.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EA stock the variable cost ratio is equal to 27.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2351 million in the base year in the intrinsic value calculation for EA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Electronic Arts.

Corporate tax rate of 27% is the nominal tax rate for Electronic Arts. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EA are equal to 5.2%.

Life of production assets of 11.4 years is the average useful life of capital assets used in Electronic Arts operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EA is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4060 million for Electronic Arts - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 306.536 million for Electronic Arts is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Electronic Arts at the current share price and the inputted number of shares is $36.6 billion.

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Stock chart of EA Financial statements of EA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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