Electronic Arts: Reasonably Priced, Catalysts to Come

Electronic Arts (EA) appears poised to continue seeing growth despite the easing of lockdown restrictions. The company develops and publishes video games, and is known for its sports and Battlefield Read More... The post Electronic Arts: Reasonably Priced, Catalysts to Come appeared first on TipRanks Financial Blog.

Electronic Arts: Reasonably Priced, Catalysts to Come

Electronic Arts (EA) appears poised to continue seeing growth despite the easing of lockdown restrictions.

The company develops and publishes video games, and is known for its sports and Battlefield franchises. The company appears reasonably priced at approximately 19.3 times next year's earnings.

However, we remain neutral on the stock in the short-term, as we believe its stock price uptrend is breaking down. (See Electronic Arts stock charts on TipRanks)

Growth Catalysts

Electronic Arts (EA) operates in the gaming industry, which was valued at $173.7 billion in 2020. The industry is expected to grow at a CAGR of 9.64% between 2021 and 2026.

A potential industry tailwind is the growth of the esports market, which is expected to grow at a CAGR of 24.4% between 2020 and 2027. In addition, the increasing prevalence of high-speed Internet in emerging economies has made online gaming more practical.

A company-specific near-term growth catalyst for Electronic Arts will be the release of Battlefield 2042. Battlefield is an important franchise for the company. Battlefield 5, the series' previous release, was viewed as a flop.

However, Battlefield 2042 appears to be generating a positive response from the gaming community based on the like-to-dislike ratios of its trailers on YouTube.

The designers of the game appear so determined to make this game a hit, that they have decided not to include a campaign mode. Instead, they dedicated all their resources towards making the online gameplay as good as possible.

Risks

Like anything, Electronic Arts comes with risks. The most obvious risk is the potential for Battlefield 2042 to be a flop. However, it's worth mentioning that Battlefield 5 has been making a comeback in the past several months.

After flopping initially, updates have been made over time that seem to have revitalized the game. Thus, the developers should have a good sense of what players want for Battlefield 2042.

However, the release date of Battlefield 2042 has been pushed out to November. This means that gamers will have a chance to buy the new Call of Duty game first, which is owned by Activision Blizzard (ATVI). This may have an impact on sales for Electronic Arts. In addition, Battlefield isn't the only game the company has. Therefore, there's the risk that any of its new releases may flop.

Wall Street's Take

Turning to Wall Street, Electronic Arts has a Strong Buy consensus rating, based on 17 Buys, and four Holds assigned in the past three months. The average Electronic Arts price target of $171.82 implies 35.2% upside potential.

Final Thoughts

Electronic Arts is a company with many great franchises. At this moment, it appears that the new Battlefield, which is set to launch in November, should be a hit.

However, the uptrend for the stock may be starting to reverse or slow down. Thus, we would wait to see if we could possibly get a better price before entering a position.

Disclosure: At the time of publication, Stock Bros Research did not have a position in any of the securities mentioned in this article.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Electronic Arts: Reasonably Priced, Catalysts to Come appeared first on TipRanks Financial Blog.

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Does IronNet Stock Rally Leave Room for More?

Thanks to the acceleration of digital transformation, and migration towards the cloud, shares of cybersecurity firm IronNet (IRNT) have headed north since it was listed on the exchange.  Notably, IronNet Read More... The post Does IronNet Stock Rally Leave Room for More? appeared first on TipRanks Financial Blog.

Does IronNet Stock Rally Leave Room for More?

Thanks to the acceleration of digital transformation, and migration towards the cloud, shares of cybersecurity firm IronNet () have headed north since it was listed on the exchange. 

Notably, IronNet stock began trading on the New York Stock Exchange on August 27, and has risen about 130% since then.

Growing cyberattacks amid ongoing digital transformations are fueling demand for IronNet’s offerings, and driving its stock higher. I have a bullish outlook on IronNet. (See IronNet stock charts on TipRanks)

Highlighting the increase in cyberattack incidents, IronNet’s co-CEO, Keith Alexander, stated that IronNet’s platform provides “real time exchange of cyber event information and online collaboration for a radically improved defense.”

Thanks to favorable industry trends, IronNet’s ARR (annual recurring revenue) increased by 24% year-over-year to $24.1 million in Q2. Furthermore, its customer count increased to 51 from 22 in the prior-year period. 

However, its operating loss widened, while its calculated billings declined to $3.5 million compared to $7.4 million in the prior year.

Nevertheless, the company stated that the momentum in new customers remains strong so far in the second half of FY22. Furthermore, the company expects to double its ARR in Q3, on the back of its cloud-focused business, large new customer contracts, and increasing market recognition.

Owing to strength in its cloud-based subscription revenue, IronNet expects to deliver revenues of $43 million to $45 million in FY22. Moreover, it projects an ARR of $75 million at the end of FY22. 

Thanks to the strong outlook, investors’ interest in IronNet stock remains elevated. TipRanks’ Stock Investors tool indicates that investors currently have a Very Positive outlook on IronNet stock, with 27.2% of investors who hold portfolios on TipRanks increasing their exposure over the past seven days.

Further, IRNT scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that it has strong potential to outperform market expectations.

Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Does IronNet Stock Rally Leave Room for More? appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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