Winners And Losers Of Q3: Electronic Arts (NASDAQ:EA) Vs The Rest Of The Video Gaming Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Electronic Arts (NASDAQ:EA) and its peers.

Since videogames were invented in the 1970s, they have gradually taken more share of entertainment time. Ubiquitous mobile devices have powered a surge in “snackable” games that can be played on the go. Over time, games have developed more social engagement features where friends can play games together over the internet. The business models of games publishers have become less volatile due to digitization of distribution, in game monetization, and like Hollywood, an increasing dependence on surefire hit franchises. Covid driven lockdowns accelerated adoption and usage of videogames – a trend that has not slowed.

The 4 video gaming stocks we track reported a softer Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.9% below.

Luckily, video gaming stocks have performed well with share prices up 15.6% on average since the latest earnings results.

Electronic Arts (NASDAQ:EA)

Electronic Arts reported revenues of $2.03 billion, up 5.8% year on year. This print exceeded analysts’ expectations by 2.3%. Despite the top-line beat, it was still a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.

Unsurprisingly, the stock is down 18.3% since reporting and currently trades at $118.98.

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Best Q3: Take-Two (NASDAQ:TTWO)

Take-Two reported revenues of $1.35 billion, up 4.1% year on year, outperforming analysts’ expectations by 1%. The business performed better than its peers, but it was unfortunately a slower quarter with full-year EBITDA guidance missing analysts’ expectations.

Take-Two pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 10.8% since reporting. It currently trades at $184.50.

Weakest Q3: Skillz (NYSE:SKLZ)

Skillz reported revenues of $24.56 million, down 32.6% year on year, falling short of analysts’ expectations by 7.9%. It was a disappointing quarter as it posted a decline in its users and a significant miss of analysts’ number of paying monthly active users estimates.

Skillz delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 121,000 monthly active users, down 28% year on year. Interestingly, the stock is up 14.5% since the results and currently trades at $6.46.

Roblox (NYSE:RBLX)

Roblox reported revenues of $919 million, up 28.8% year on year. This print surpassed analysts’ expectations by 3.8%. More broadly, it was a slower quarter as it produced full-year EBITDA guidance missing analysts’ expectations.

Roblox scored the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update among its peers. The company reported 88.9 million daily active users, up 26.6% year on year. The stock is up 55.5% since reporting and currently trades at $67.11.

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This content was originally published on Stock Story