Is Electronic Arts, Inc. overvalued or undervalued?

Jun 25 2025 08:11 AM IST
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As of March 7, 2025, Electronic Arts, Inc. is considered overvalued with a valuation grade of expensive, reflected by a P/E ratio of 32, an EV to EBITDA of 18.91, and a Price to Book Value of 5.87, despite a stock return of 11.04% that slightly outperforms the S&P 500's 10.26%.
As of 7 March 2025, the valuation grade for Electronic Arts, Inc. has moved from fair to expensive. The company is currently overvalued based on its financial metrics. Key ratios include a P/E ratio of 32, an EV to EBITDA of 18.91, and a Price to Book Value of 5.87.

In comparison to its peers, Electronic Arts has a higher P/E ratio than Cadence Design Systems, Inc. (87.87) and Synopsys, Inc. (54.66), which are both rated as fair. Additionally, while Electronic Arts has shown a stock return of 11.04% over the past year, it still lags behind the S&P 500's return of 10.26% in the same period, reinforcing the notion that the stock may be overvalued relative to its performance.
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