Electronic Arts Stock Just Tanked: Time to Buy the Dip?
Electronic Arts (NASDAQ: EA), video game publisher and owner of beloved entertainment franchises like The Sims, FIFA Soccer, and Apex Legends, disappointed investors with its quarterly earnings report covering the last three months of 2022. The company saw weakening demand for one of its core franchises, delayed a big Star Wars game until its next fiscal year, and scrapped multiple mobile titles that were under development.
All of this will affect EA's financials in the near term and caused the stock to fall more than 10% in the days following the report. However, over the long term, EA still has a lot working in its favor. Let's investigate whether now is a good time to buy the dip on this video game publisher.
In the third quarter, EA reported a 5% bookings decline in constant currency terms. Bookings are equivalent to revenue for video game companies, and constant currency just means sales growth excluding fluctuations in foreign currencies, which are outside of EA's control. With the launch of a Battlefield game in the same period last year, a slight decline in bookings was to be expected. In fact, if you look at EA's bookings from in-game purchases, they were actually up 3% year over year (in constant currency terms) for the quarter and are up 4% over the past 12 months.
Source Fool.com
