Electronic Arts: Going Digital, Going For 30% Margins?
AtonRa Partners • Today, 8:47 AM
- EA’s recently-announced Access initiative will increase the amount of recurring revenues and the weight of digital revenues within the revenue mix.
- Margins will obviously benefit from this model transition. Ultimately, EA could reach a margin close to 30% (vs. 21.5% expected in FY15), in line with that of Activision.
- The valuation remains a key Buy argument: it's not specifically demanding in view of expected EPS growth and, importantly, does not factor at all a bull case scenario (40% upside).