Electronic Arts

Methodology

Electronic Arts' gaming business generates relatively predictable earnings from live services and sports franchises, though new title performance creates quarterly volatility. The FIFA (now EA Sports FC), Madden, and Apex Legends franchises provide recurring revenue stability. Fair value works well when accounting for mid-single-digit earnings growth from player engagement and digital monetization.

Methodology

EA typically trades at PEG ratios between 1.5-2.5x, reflecting solid but unspectacular growth in mature gaming franchises and concerns about live service competition. The company's sports licensing advantages and Ultimate Team monetization support steady earnings. PEG works reasonably well though growth potential remains constrained without major franchise reinvention.

Methodology

EA pays a minimal dividend yielding under 1%, making PEGY nearly identical to PEG for valuation purposes. The company supplements dividends with consistent share buybacks funded by strong free cash flow. Total return focuses primarily on earnings growth from digital engagement rather than income generation.