2-Star Stocks Poised to Plunge: Electronic Arts?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video game publisher Electronic Arts (Nasdaq: EA  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Electronic Arts and see what CAPS investors are saying about the stock right now.

Electronic Arts facts

Headquarters (founded) Redwood City, Calif. (1982)
Market Cap $4.2 billion
Industry Home entertainment software
Trailing-12-Month Revenue $4.1 billion
Management CEO John Riccitiello (since April 2007)
CFO Blake Jorgensen (since September 2012)
Return on Equity (average, past 3 years) (5.2%)
Cash/Debt $1.4 billion / $544.0 million
Competitors Activision Blizzard
Nintendo
Ubisoft Entertainment

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 12% of the 2,234 members who have rated Electronic Arts believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star ElViking, succinctly summed up the bear case for our community:

[Electronic Arts] makes a lot of crappy video games. A big part of their strategy is tied to their exclusive deal with the NFL for Madden. Low morale at [Electronic Arts] is an old, old story. Console gaming is struggling, and [Electronic Arts] is definitely not the best in its class.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of and creating a synthetic long position in Activision. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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