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EA trades against a final fair-value range of $85.13-$188.44, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.
A combined scenario where EA loses its exclusive NFL license and sweeping global regulations ban Ultimate Team mechanics. This would structurally impair the 1.85x OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement.-to-Net-Income conversion and compress operating margins well below 20%, driving the valuation toward the $85 downside case.
Global regulatory actions classify Ultimate Team 'loot boxes' as gambling, heavily restricting or banning the mechanic in key markets.
The NFL decides to move away from an exclusive licensing agreement, allowing competitors to release simulation football titles.
Core franchises experience severe player attrition due to a lack of innovation and aggressive monetization, leading to a permanent structural decline in live-service revenues.
| Line item | 2022-03-31 | 2023-03-31 | 2024-03-31 | 2025-03-31 | 2026-03-31 | Trend |
|---|---|---|---|---|---|---|
| Revenue | $6.99B | $7.43B+6.3% | $7.56B+1.7% | $7.46B-1.3% | — | +1.6% |
| Gross profit | $5.13B | $5.63B | $5.85B | $5.92B | — | +3.6% |
| Operating income | $1.13B | $1.44B | $1.58B | $1.58B | — | +8.7% |
| Net income | $789.0M | $802.0M+1.6% | $1.27B+58.4% | $1.12B-11.8% | — | +9.2% |
| EPS (diluted) | $2.76 | $2.88 | $4.68 | $4.25 | $3.51 | +6.2% |
| EBITDA | $1.63B | $1.92B | $2.05B | $2.02B | — | +5.6% |
| R&D | $2.19B | $2.33B | $2.42B | $2.57B | — | +4.1% |
| SG&A | $1.63B | $1.71B | $1.71B | $1.71B | — | +1.1% |
Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Deterioration versus the report thesis |
| Regulatory investigations opened in major gaming markets (EU, US). | Monitor | Deterioration versus the report thesis |
| Significant player base decline in EA FC or Madden. | Monitor | Deterioration versus the report thesis |
