Could Electronic Arts Inc. (NASDAQ:EA) hit speed bumps?


Electronic Arts Inc. (NASDAQ:EA) shares surged after the company reported earnings for the 4th quarter 2017 fiscal year. Net revenue for the year was $4.8 billion, cost of revenue $1.3 billion, and operating income of $1.2 billion. Most importantly, these results enabled the company to deliver record operating cash flow of almost $1.4 billion. EA also returned over half a billion dollars to shareholders through a repurchase program in fiscal 2017.

Shares of Electronic Arts Inc. (NASDAQ:EA) last traded at $110.90. The company’s performance year to date is 40.81%. The 200 day simple moving average is 32.11%. The 200 simple moving average (SMA) is considered a key indicator by traders and market analysts for determining the overall long-term trend. The price level in a market that coincides with the 200 SMA is recognized as a major support when price is above the 200 SMA or resistance when price is below the 200 SMA level.

As per recent filings, Electronic Arts Inc. (NASDAQ:EA) has an insider ownership of 0.20%.

Electronic Arts Inc. operates in two principal business segments globally: EA Core business segment: creation, marketing and distribution of entertainment software and the business segment: creation, marketing and distribution of entertainment software which can be played or sold online.

Electronic Arts Inc. (NASDAQ:EA) has been storming Wallstreet with solid press release. Recently, the company announced that according to the March 2017 study commissioned by RetailMeNot and conducted by Forrester Consulting, the company’s mobile marketing solutions generate a three-year, risk-adjusted return on investment (ROI) of 4.3x.

The Barchart Technical Opinion rating is a 100% Buy with a Strongest short term outlook on maintaining the current direction. Longer term, the trend strength is in the Top 1%. Long term indicators fully support a continuation of the trend. The market is in highly overbought territory. Beware of a trend reversal.

The Exponential Moving Average (EMA) is similar to a simple moving average (average price over a set period) but it utilizes a weighting factor that exponentially declines from the most recent data point (recent prices are weighted higher than oil prices). EMA analysis compares the short term (5 days and 13 days), intermediate term (20 days) and long term (50 days) EMA’s. The respective EMA’s will give bullish signals when trading above trailing EMA’s and below the current price and vice versa. EMA alerts include crossovers (i.e the 5 day EMA crosses above/below the 20 day EMA) and EMA convergencies (5 day EMA equivalent to 13 day EMA). .

The relative strength index (RSI) is a momentum oscillator that is able to measure the velocity and magnitude of stock price changes. Momentum is calculated as the ratio of positive price changes to negative price changes. The RSI analysis compares the current RSI against neutral(50), oversold (30) and overbought (70) conditions. Alerts will inform you when stocks recede from oversold/overbought levels or breakthrough neutral (50).

Electronic Arts Inc. (NASDAQ:EA) is all set to announce its earnings on May 09/a. As per Zack’s analyst ratings, Electronic Arts Inc. (NASDAQ:EA) currently has an average brokerage rating of 1.68. On a scale of 1 to 5, a rating of 1 or 2 would indicate a buy, and a rating of 4 or 5 would signify a sell recommendation. A rating of 3 would indicate a hold on the stock. The consensus target price on (NASDAQ:EA) is $104.683 with a high of $123 and a low of $85.

As such, while we believe Electronic Arts Inc. (NASDAQ:EA) represents a compelling growth story exposed to several secularly attractive markets, it would be interesting to see how it fairs for long-term investors.