DCF Tool

EA

Electronic Arts, Inc. – Software Publishers
electronic arts inc. is a leading global interactive entertainment software company. ea delivers games, content and online services for internet-connected consoles, personal computers, mobile phones and tablets.
Analysis Results
Intrinsic Value $132.68
Latest Price $117.97
Relative Value 11% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 7.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 7.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2024 1.62 1.51
2025 1.74 1.51
2026 1.87 1.52
2027 2.01 1.52
2028 2.15 1.53
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 42.9 billion. This corresponds to a present value of 28.4 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.59 billion. Adding in the terminal value gives a total present value of 35.9 billion.

There are presently 271.0 million outstanding shares, so the intrinsic value per share is 132.68.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 3,969,000,000
Current Cash 2,767,000,000
Current Liabilities 3,285,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -2,083,000,000
Change in NCWC 341,000,000
EBIT 1,443,000,000
Tax Provision 524,000,000
Depreciation and Amortization 536,000,000
Capital Expenditure -207,000,000
Unlevered Free Cash Flow 1,542,764,705
Current Assets 4,151,000,000
Current Cash 3,062,000,000
Current Liabilities 3,513,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -2,424,000,000
Change in NCWC -307,000,000
EBIT 1,129,000,000
Tax Provision 292,000,000
Depreciation and Amortization 486,000,000
Capital Expenditure -188,000,000
Unlevered Free Cash Flow 815,034,227
Current Assets 7,213,000,000
Current Cash 6,366,000,000
Current Liabilities 2,964,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -2,117,000,000
Change in NCWC -834,000,000
EBIT 1,046,000,000
Tax Provision 180,000,000
Depreciation and Amortization 181,000,000
Capital Expenditure -124,000,000
Unlevered Free Cash Flow 83,867,256
Current Assets 6,517,000,000
Current Cash 5,735,000,000
Current Liabilities 2,664,000,000
Current Debt 599,000,000
Non-Cash Working Capital (NCWC) -1,283,000,000
Change in NCWC 46,000,000
EBIT 1,450,000,000
Tax Provision -1,531,000,000
Depreciation and Amortization 150,000,000
Capital Expenditure -140,000,000
Unlevered Free Cash Flow 1,506,000,000
Current Assets 6,381,000,000
Current Cash 5,445,000,000
Current Liabilities 2,265,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,329,000,000
Change in NCWC 489,000,000
EBIT 1,010,000,000
Tax Provision 60,000,000
Depreciation and Amortization 145,000,000
Capital Expenditure -119,000,000
Unlevered Free Cash Flow 1,468,836,886
Current Assets 6,004,000,000
Current Cash 5,331,000,000
Current Liabilities 2,491,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,818,000,000
Change in NCWC -70,000,000
EBIT 1,434,000,000
Tax Provision 406,000,000
Depreciation and Amortization 136,000,000
Capital Expenditure -107,000,000
Unlevered Free Cash Flow 991,202,898
Current Assets 5,199,000,000
Current Cash 4,532,000,000
Current Liabilities 2,415,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,748,000,000
Change in NCWC -11,000,000
EBIT 1,224,000,000
Tax Provision 243,000,000
Depreciation and Amortization 172,000,000
Capital Expenditure -123,000,000
Unlevered Free Cash Flow 1,016,188,429
Current Assets 4,354,000,000
Current Cash 3,834,000,000
Current Liabilities 2,418,000,000
Current Debt 161,000,000
Non-Cash Working Capital (NCWC) -1,737,000,000
Change in NCWC -291,000,000
EBIT 898,000,000
Tax Provision -279,000,000
Depreciation and Amortization 197,000,000
Capital Expenditure -93,000,000
Unlevered Free Cash Flow 711,000,000
Current Assets 3,720,000,000
Current Cash 3,021,000,000
Current Liabilities 2,747,000,000
Current Debt 602,000,000
Non-Cash Working Capital (NCWC) -1,446,000,000
Change in NCWC 171,000,000
EBIT 945,000,000
Tax Provision 50,000,000
Depreciation and Amortization 220,000,000
Capital Expenditure -95,000,000
Unlevered Free Cash Flow 1,189,918,918
Current Assets 3,138,000,000
Current Cash 2,365,000,000
Current Liabilities 2,390,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,617,000,000
Change in NCWC -345,000,000
EBIT -3,000,000
Tax Provision -1,000,000
Depreciation and Amortization 227,000,000
Capital Expenditure -97,000,000
Unlevered Free Cash Flow -218,000,000
Current Assets 2,325,000,000
Current Cash 1,680,000,000
Current Liabilities 1,917,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,272,000,000
Change in NCWC 88,000,000
EBIT 84,000,000
Tax Provision 41,000,000
Depreciation and Amortization 264,000,000
Capital Expenditure -106,000,000
Unlevered Free Cash Flow 305,223,021
Current Assets 2,609,000,000
Current Cash 1,849,000,000
Current Liabilities 2,120,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) -1,360,000,000
Change in NCWC -154,000,000
EBIT 62,000,000
Tax Provision -58,000,000
Depreciation and Amortization 216,000,000
Capital Expenditure -172,000,000
Unlevered Free Cash Flow -48,000,000

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