NEW YORK (TheStreet) -- Electronic Arts (EA) shares are up 5.62% to $62.49 in early market trading on Wednesday after the video game maker beat analysts fourth quarter expectations, and the company was given a "sector weight" rating by analysts at Pacific Crest today.
The maker of the highly successful 'Madden NFL' franchise reported $896 million in revenue during the period yielding an EPS of 39 cents per share. The results topped Pacific Crest's own expectations of $877 million in revenue and earnings 33 cents per share.
However, analysts at the firm remain cautious about the company despite the earnings and revenue beat, and are looking for a better entry point than the Redwood City, CA-based company's current levels:
"We are also lowering our F2016 revenue estimate to $4.52 billion from $4.60 billion and raising our EPS estimate to $3.00 from $2.60. Based on our new estimates, we think EA is fairly valued in low $60s. We continue to look for a better entry point to get more constructive on the name and prefer Activision ( (ATVI) $22.71, Overweight) and GameStop ( (GME), $40.02, Overweight) in the near term."
TheStreet Ratings team rates ELECTRONIC ARTS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ELECTRONIC ARTS INC (EA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."