Electronic Arts Inc. (EA) DCF Valuation
Transparent DCF models put Electronic Arts Inc. (EA)'s fair value in a range of $119.86 – $130.38 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $203.20 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $203.20, the market is pricing in roughly +11.3%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +5.1%. The price is betting on acceleration above its track record.
Current Price
$203.20
Fair-Value Range
$119.86 – $130.38
Market-Implied Growth
+11.3%/yr
vs +5.1% 5Y actual
EA DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $1.9B · 0.25B shares · net cash $1.4B
Estimated Fair Value
$130.38
-35.8% vs $203.20
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $203.20; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $161 | $169 | $178 | $189 | $203 |
| 9.0% | $139 | $144 | $151 | $158 | $166 |
| 10.0% | $122 | $126 | $130 | $135 | $141 |
| 11.0% | $109 | $112 | $115 | $119 | $123 |
| 12.0% | $98.45 | $101 | $103 | $106 | $108 |
About Electronic Arts Inc.
Electronic Arts Inc., established in 1982 and based in Redwood City, California, is a global leader in the creation, promotion, publication, and distribution of interactive entertainment. The company delivers a wide array of games, content, and services for various platforms, including gaming consoles, personal computers, smartphones, and tablets across the globe. EA develops and releases titles spanning popular genres such as sports, racing, first-person shooters, action, role-playing, and simulation. Its prominent proprietary franchises include Battlefield, The Sims, Apex Legends, and Need for Speed, alongside celebrated licensed properties like FIFA, Madden NFL, UFC, and Star Wars. Furthermore, Electronic Arts grants licenses for its games to external partners for distribution and hosting. The company reaches its customers through diverse channels, encompassing digital storefronts, traditional retail outlets, direct sales to major retailers and specialty shops, and various distribution agreements.
- Sector
- Communication Services
- Industry
- Electronic Gaming & Multimedia
- CEO
- Andrew Wilson