Electronic Arts Earnings: Continued Apex Weakness and a Tepid Outlook Temper Our Enthusiasm

Electronic Arts posted soft fiscal fourth-quarter results and issued a relatively weak outlook for fiscal 2025, owing to a smaller number of new titles and tepid expectations for live services coupled with increased investments to drive longer-term growth. Management offered margin expectations through fiscal 2027 to communicate confidence in the firm’s trajectory as it increases focus on core franchises like Sports FC and Apex Legends. After adjusting our expectations, we are cutting our fair value estimate to $140 from $150.