Electronic Arts's most recent trend suggests a bullish bias. One trading opportunity on Electronic Arts is a Bull Put Spread using a strike $90.00 short put and a strike $80.00 long put offers a potential 23.15% return on risk over the next 29 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $90.00 by expiration. The full premium credit of $1.88 would be kept by the premium seller. The risk of $8.12 would be incurred if the stock dropped below the $80.00 long put strike price.
The 5-day moving average is moving up which suggests that the short-term momentum for Electronic Arts is bullish and the probability of a rise in share price is higher if the stock starts trending.
The 20-day moving average is moving up which suggests that the medium-term momentum for Electronic Arts is bullish.
The RSI indicator is at 42.27 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Electronic Arts
League of Legends Creator Unveils New Titles to Avoid Being One-Hit Wonder
Wed, 16 Oct 2019 02:00:00 +0000
(Bloomberg) — Riot Games, which spent the past decade exploiting one product, is finally looking to expand.The Los Angeles-based creator of League of Legends said Tuesday it’s working on six new games. They include Wild Rift, a version of its flagship title for mobile and console devices that will debut next year, and Legends of Runeterra, an online card game featuring the company’s universe of characters.The bigger portfolio, which will include shooter, fighting and adventure titles, means more competition for giants such as Activision Blizzard Inc. and Electronic Arts Inc. It’s also a growth opportunity for Riot Games’ parent, Chinese internet giant Tencent Holdings Ltd., which has seen its game revenue and online ad businesses in China soften.League of Legends generated $1.4 billion in revenue last year, according to Nielsen’s SuperData Research. Over 100 million people play the game, which takes place in a fantasy world of battling demigods and dragons. At one point in August, more than 8 million were playing at once, the company said, setting a worldwide record for computer games.That makes this a good time to expand, according to company co-founder Marc Merrill.“League of Legends started as this tiny, kind of janky game, and has evolved into this global phenomenon,” Merrill said in an interview. “‘We view the next 10 years, all these games coming, as sort of the proof point. Is this crazy idealism that led to this company? Is that what people really want?”Several of the new games will be based in the League of Legends universe. A second, new mobile game is a spinoff of a current League of Legends mode called Teamfight Tactics, where players battle seven opponents on a rotating basis. The company is also creating an animated video series featuring its characters, for an outlet that has yet to be determined.Riot has taken its time developing new products to create games that differ from its lone product and those of competitors, Merrill said.Unlike League of Legends, which can take more than an hour to play, the mobile versions are designed to run 20 minutes. The shooting game is being engineered to thwart aimbots — outside software that gives an unfair advantage to players who use them.The new-product announcements, made during an hourlong webcast, are part of a 10-year anniversary celebration for League of Legends. The bash includes matches featuring some of the game’s original players, special gifts for online fans and the introduction of a new warrior, Senna, whom fans know since she’s been trapped in a lantern in the game for years.Riot Games was founded in 2006 by Merrill and Brandon Beck, two former University of Southern California classmates. They were dissatisfied with the industry model of releasing new versions of games once a year.They developed a title that’s free to play and updated regularly with new characters and experiences. Riot makes money when players purchase gear in the game, such as costumes for characters. Prices range from $4 to $25.In League of Legends, two teams of five players compete to destroy the other side’s crystal-shaped nexus. The characters, which have their own powers, battle each other and waves of foot soldiers, called minions.In Legends of Runeterra, which enters beta testing this month, players won’t be required to purchase packs of random cards, as they do in other games, such as Activision’s Hearthstone. Instead, Runeterra will be free to play, with contestants choosing what to purchase.“Unless we’re going to do something that we think is really going to elevate the experience, let’s not bother to do it,” Merrill said of Riot’s philosophy.Merrill and Beck sold the company to Tencent in a pair of transactions that began in 2011 because their original investors wanted out and the two didn’t want to pursue a public offering. Merrill and Beck share management decisions, along with Chief Executive Officer Nicolo Laurent, who’s been there for 10 years. Merrill describes himself as more of the product developer, while Beck is the corporate strategist.“We would have made a terrible public company,” Merrill said. “We are pretty idealistic. We’re also very long-term or have attempted to be very long-term.”All has not always been sunny with Tencent. After unsuccessfully prodding Riot to launch a mobile game, Tencent in 2017 introduced its own, Arena of Valor, with characters that look like those in League of Legends.Merrill describes that as a “trying time in the relationship,” but adds that the parties have since reconciled.Today, Riot has more than 2,500 employees and two dozen offices around the world. Its headquarters are a triumph of nerd whimsy, with giant statues of League of Legends characters and a piratey coffee shop named after one of the cities in the game, Bilgewater Brews.Riot is a pioneer in esports, where fans watch pros play online and in arenas. Two years ago, the company sold 10 North American League of Legends franchises for $10 million each. Its annual World Championship, held in November, is considered the Super Bowl of esports, with fans selling out stadiums.Merrill said it’s too soon to say if any of the new games will turn into professional competitions. “We don’t decide if something is an esport, the community does,” he said. On Friday, the company weighed into the controversy over Hong Kong protests, saying its esports broadcasters and players must refrain from discussing politics and other sensitive topics.In recent months, the company has also wrestled with discontent among some Rioters, as employees call themselves. Over the past year, a number of former female employees sued the company, alleging gender discrimination in pay and promotion, and sexual harassment. In May, dozens of employees demonstrated in the company quad over the “bro-like” culture and clauses in their contracts that require them to settle workplace complaints through arbitration.The company settled the suits in August for undisclosed terms. It has also added a chief diversity officer and said it would focus on greater workplace inclusion.Merrill said the past year was a “challenging period” for him and the company, but also a moment of reflection and change.“There’s a lot of defining moments as companies evolve and grow,” he said. “The optimist in me says that this will be one for Riot.”To contact the reporter on this story: Christopher Palmeri in Los Angeles at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Rob Golum, Sam HallFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Here’s Why Electronic Arts Stock has Upside to $100 in 2020
Tue, 15 Oct 2019 09:01:57 +0000
After starting off the year red hot, shares of video game publisher Electronic Arts (NASDAQ:EA) have gone nowhere over the past eight months, bouncing between $90 and $100 with no net gain. The culprit behind the sideways trading in EA stock? Sluggish global video game sales trends, and a tapering of interest related to the company's free-to-play, battle royal franchise Apex Legends.Source: Rick Neves / Shutterstock.com But sluggish video game trends will reverse course in 2020 as new consoles release, and Apex Legends has an opportunity to regain lost interest with new season launches and some game-play modifications.Does that mean EA stock will stop trading sideways, and start heading higher in 2020? Yes. The fundamentals say that EA stock will trade north of $100 by the end of fiscal 2020, and the optics imply that the rally in EA stock could get started later this year with the launch of a new Star Wars game.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThe investment implication? Buy EA stock on weakness ahead of the Star Wars game launch next month, and hold for upside to $100-plus levels in 2020. Fundamentals Say EA Stock Will Top $100Zooming out, the big picture, long-term fundamentals here imply that EA stock will drive towards $100-plus prices within the next 12 months. * 10 Best Cloud Growth Stocks Right Now That big picture logic is pretty simple. The video game industry is a secular growth one, supported by favorable underlying tailwinds such as the digital consumption pivot and mainstream eSports emergence, and technological breakthroughs such as cloud gaming and AR/VR. As such, video game engagement and spend — which has been on a steady high-single-digit growth trajectory — should sustain robust growth for the foreseeable future.EA is a big and important player in that secular growth market, with:* A powerful content portfolio that has enduring appeal and includes titles like Madden, FIFA, and Star Wars;* A strong free-to-play, battle royal arm with Apex Legends; and,* A broad content line-up that lends itself well to esports competitions. As such, so long as the video game market continues to grow, so will Electronic Arts.That's why EA has been, still is, and projects to remain a mid-single-digit revenue growth company. At the same time, broader inclusion of in-game spending transactions through things like loot boxes will increase revenue per title, boost unit economics, and provide a lift to margins. Share repurchases will also factor in.Net net, EA reasonably projects as a 10% profit grower over the next few years. My modeling suggests that $8.40 in EPS is doable by FY26. Based on a consumer discretionary sector-average forward earnings multiple of 21x and a 10% annual discount rate, that equates to a FY20 price target for EA stock of ~$110. Optics Imply the Rally Will Start SoonWhile the fundamentals imply that Electronic Arts stock will drive toward $100 over the next 12 months, the optics imply that this big rally could get started relatively soon.Specifically, EA launches a new Star Wars game — Stars Wars Jedi: Fallen Order — on Nov. 15. This new game should be a huge hit for a few reasons. First, consumers love Star Wars. Second, this is the first major release, console-based Star Wars game we've had in a few years. Third, the last movie installment in the most recent Star Wars trilogy debuts a month after the game, meaning that this holiday season will be dominated by Star Wars themes.As such, EA's Star Wars Jedi: Fallen Order numbers should be pretty good. At the same time, EA just released season 3 of Apex Legends and while season 2 was a letdown relative to season 1, early murmurs are that season 3 is off to a much hotter start because there's just so much new content (season 2 notably lacked new content). * 10 Great Biotech Stocks to Buy in Q4 This double tailwind from Star Wars and Apex Legends will give the company strong momentum heading into 2020 — a year which projects to be huge for EA, given that it will have the first new console refresh cycle in seven years.As such, it broadly feels like the whole narrative surrounding EA stock will turn soon, and gain considerable positive momentum over the subsequent several quarters. The implication? Buy EA stock on weakness today, and hold for $100-plus prices in 2020. Bottom Line on EA StockElectronic Arts has been stuck in neutral for eight months. This sideways trading will end soon. Season 3 of Apex Legends and a new Star Wars game will inject positive momentum into EA stock at the end of 2019, and new consoles in 2020 will sustain that upward momentum to $100-plus prices.As of this writing, Luke Lango was long EA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post Here's Why Electronic Arts Stock has Upside to $100 in 2020 appeared first on InvestorPlace.
There Doesn’t Appear to Be a Clear Path Forward for EA Stock
Mon, 14 Oct 2019 10:40:47 +0000
The case for video gaming plays like Electronic Arts (NASDAQ:EA) seems reasonably simple. Gaming demand continues to rise. The transition to digital downloads has bypassed retailers like GameStop (NYSE:GME) and Walmart (NYSE:WMT), presumably boosting margins in the process. For Electronic Arts stock, in particular, dominant sports franchises provide a stable profit baseline – and perhaps a floor to valuation.Source: Konstantin Savusia / Shutterstock.com The problem at the moment is that the case has held for a few years now. And EA stock has done nothing. In fact, it's traded down 14% over the last 29 months.In other words, that bull case doesn't look like quite enough. Electronic Arts needs to show more. The problem, less than three weeks out from fiscal second-quarter earnings, is that it's not at all clear what the company can do to surprise investors.InvestorPlace – Stock Market News, Stock Advice & Trading Tips EA Stock Falls FlatThe problem with EA isn't just a matter of the market's reaction. Operationally, EA hasn't performed well. Net bookings actually are down 4%+ over the past twelve months, according to figures from the company's fiscal Q1 release. That includes just a 5% increase in digital net bookings, the supposed growth driver. * 10 Super Boring Stocks to Buy With Super Safe Returns EA doesn't disclose non-GAAP figures, but it does seem like earnings growth is relatively minimal. Analyst consensus for EPS this year (and the Street usually uses adjusted figures) suggests a roughly 8% increase year-over-year. There's some help from share buybacks in there as well.Even at an admittedly reasonable multiple, that doesn't look quite enough. And it's with the help from Apex Legends that spiked the stock above $100 earlier this year. I thought those gains were overdone, and that appears to have been the case. Indeed, Electronic Arts stock fell almost 10% in two sessions when Season 2 of Apex began – and hasn't recovered since. Electronic Arts Stock Lacks a DriverSo what's the bull case now? The case for just buying video game stocks seems to have run its course. Indeed, rival Activision Blizzard (NASDAQ:ATVI) similarly has fallen sharply from 2018 highs, though ATVI has rallied in recent weeks.Take-Two Interactive (NASDAQ:TTWO) did almost get back to last year's levels before a recent fade, but that's kind of the point. Unlike EA and Activision Blizzard, Take-Two isn't just reliant on older franchises. Those franchises – whether it's Call of Duty or Madden – aren't driving enough growth. It's Fortnite, and even social gaming, that look more attractive at the moment.And so the key question for Electronic Arts is: where is its new franchise? Where is its new growth driver? The company doesn't have an answer right now, which is why EA stock has traded sideways for most of this year. The Case for EA StockTo be fair, what EA can deliver might be enough to drive some upside in Electronic Arts stock. EA is cheap, at a little over 20x fiscal 2020 consensus EPS estimates. Back out the company's cash hoard (about $14 per share)and the multiple drops to a reasonable 17x.That's a multiple that likely only prices in single-digit growth – and that's what Electronic Arts can deliver. So an investor can perhaps afford to be patient here, hoping for an earnings beat later this month, an acceleration in Apex Legends, or new momentum behind one of the legacy sports franchises.At the same time, however, that's not a very compelling bull case. And it leaves the same problem: something here needs to change. The old bull case isn't working. Electronic Arts needs a new one – but it's not yet clear what it can be.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post There Doesn't Appear to Be a Clear Path Forward for EA Stock appeared first on InvestorPlace.
5 questions with EA Sports' Daryl Holt about his firm's downtown move
Fri, 11 Oct 2019 18:09:00 +0000
The local head of EA talked about what the move may mean for the largest video game studio in Florida.
Electronic Arts' New Release FIFA 20 Becomes an Instant Hit
Fri, 11 Oct 2019 15:07:03 +0000
Electronic Arts' (EA) position in the video gaming market is likely to increase with the successful launch of FIFA 20.
Also on Market Tamer…
Follow Us on Facebook