EA Stock: Here’s Why Electronic Arts Inc. Could Soar in 2016

EA StockThis is Huge for EA Stock

Electronic Arts Inc. (NASDAQ:EA) stock, a gaming software company, has been riding on a bullish wave since 2011. In five years, the stock moved from $18.00 to more than $74.00. It is now trading at $66.00 after last February’s sell-off, but bullish sentiment is high on the company. EA stock may be heading toward $80.00. Electronic Arts designs and sells game software content and services. Some of its most familiar brands include Need for Speed and The Sims.

Indeed, the firm Robert W. Baird has a target price of $80.00 on EA stock. This implies a potential upside of 22.17%. (Source: “Electronic Arts Inc. (EA) Rating Reiterated by Robert W. Baird,” The Vista Voice, March 2, 2016.)

EA stock has benefited from the surprising success of the company’s Star Wars: Battlefront game. The game sold briskly during the 2015 holiday season, despite poor reviews from those who know about such things as video games. All investors need to worry about is that sales have already surpassed 13 million copies. EA has made $660 million in revenue so far, beating its own sales predictions for the game. (Source: “Star Wars Battlefront On Track to Sell More Copies Than Both Original Battlefront Games Combined,” Crave Online, February 23, 2016.)

Clearly, EA is benefiting from the Star Wars movie franchise itself. Star Wars, just like the universe itself, appears to have no boundaries.

Star Wars: Battlefront is just the beginning. EA can adapt the Star Wars platform to other games. In fact, EA has other Star Wars titles already on offer. These include Galaxy of Heroes and The Old Republic. Given the cross-generational reach of Star Wars, EA can count on an ever-growing base of people who want to play in the Star Wars universe.

EA can exploit this cultural anomaly to continue developing related games, including games for smartphones. The more Star Wars content Disney puts out, the more EA can offer games.

If Star Wars is too “bourgeois” for you, know that EA is not about to put all its eggs in Chewbacca’s basket.

Electronic Arts is in a fighting spirit. It acquired a UFC (Ultimate Fighting Championship, the main Mixed Martial Arts organization) license to develop related games. In June 2014, EA developed EA Sports UFC 2, to be released on “PlayStation 4” and “Xbox One” on March 17, 2016. EA expects MMA combat fans to get into MMA with a highly specialized simulation to silence the critics.

With the Star Wars movie hype behind it and its upcoming MMA game, EA stock has sufficient firepower to appeal to a variety of gamers—a good sign for investors.

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