Videogame company EA Sports (NASDAQ:EA) released preliminary Q4 financials. The company’s Q4 bookings fell short of expectations. Further, the company’s Q1 2025 bookings missed analysts’ estimates, triggering a decline of over 4% in its stock in Tuesday’s after-hours trading. However, the company’s board approved a new stock repurchase program of $5 billion, which could provide some respite to its share price.
It’s worth noting that prolonged high interest rates and an uncertain economic outlook are taking a toll on broader spending in the gaming industry. In Q4, the game publisher posted bookings of $1.67 billion, down 14% year-over-year. Along with macro headwinds, slate timing also impacted bookings. Moreover, it missed the Street’s estimates of $1.77 billion.
EA – Q1 Performance
The company delivered net revenue of $1.78 billion in Q4, down 5% year-over-year. Nonetheless, it was in line with Street’s forecast. The year-over-year decline reflects weakness in bookings.
At the same time, EA Sports delivered adjusted EPS of $1.40 per share, down from $1.78 in the prior-year quarter. Moreover, it missed analysts’ estimates of $1.52.
Outlook
The company expects net revenue to be between $1.58 billion and $1.68 billion in the first quarter of Fiscal 2025. This compares unfavorably with revenue of $1.92 billion in the first quarter of Fiscal 2025.
Meanwhile, the company expects bookings between $1.15 billion and $1.25 billion in Fiscal Q1, below the Street’s estimate of $1.44 billion. Moreover, it reflects a year-over-year decline of 21% to 27%.
For Fiscal 2025, the company expects bookings in the range of $7.3 billion to $7.7 billion, down 2% to up 4% year over year.
Is EA a Good Stock to Buy Now?
EA stock is down about 5% year-to-date. Wall Street analysts are cautiously optimistic about EA stock post-Q4 earnings. It has six Buys and three Holds for a Moderate Buy consensus rating. Analysts’ average price target on EA stock is $151.88, implying 16.62% upside potential.
