Security Profile Electronic Arts Inc. EA: NASDAQ Enter a ticker symbol or security Search Securities Recently viewed: WFCINTDOYI SONYI ATVITTWO Last Price Day's Change Bid x Size +$0.83 +0.61% $135.55 x 200 Ask x Size $135.58 x 3 As of 10/19/2021 11:56:47 AM ET Nasdaq Basic | Day's Volume Day's Range 476,281 $134.20 - $135.73 $135.58 My Total Value: $1,894.34| Quantity: 14 View Position Details Add To Watchlist | Compare Set Alert Trade Overview Balance Sheet Income Statement Cash Flow SEC Filings Profitability (Fiscal Year) Financial Strength (Fiscal Yean Description EA Industry Avg. Description EA Industry Avg. Gross Pront Margin 73.07% 37.10'. Quick Ratio 2.4x 2.0X Operating Mergin 19.10% 1.36'. 2.4x 2.1x Profit Margin 14.79% 1.98% Current Ratio Long Term Debl Equity / Debl/Assets 26.51% 84.33% 16.21% 36.47% This company's continuing operations are more profitable than those of many other companies in its industry, resulling in an Operating Margin that is above the everage. This success is carried to the bottom line, where the Net Prof Margin is, similarly, above average. Price Esmings (TTM) 61.9x 71.2x Price/Sales Last TRI 7.2x 9.9% Price Book Last OTR, 5.3 13.7% Dividend EA) (Last Recurring Dividend Annualized) Price/ Cash Flow Last OTR) 29.Ax 66.9% Description EA Industry Avg. Duidend Yield 0.50% 0.37" Revenue Fiscal Year) Payout Rallo (Fiscal Yean 17.79% 8.27% Annual Dividend EA 50.68 $0.72 Description Industry Avg Revenue $5.86B $21.600 Revenue/Share 19.4% 28.5x EA pays an annual dividend of SO.68 and, at its current price yields 0.50% which is above the Entertainment industry average of 0.37%. Additionally, this comparty is one of the few in the Industry that pays a dividend. However, Investors seeking Income may be able to find better opportuntles as the average stock in the S&P 500 Index ylelds 1.34% Quarterly Revenue Growth (YOY) 3.53% 23.96% EBITDA $1.268 S5.368 Management Effectiveness (Fiscal Year Quarterly Earnings Growth (YOY) 43.72% -36.67% Description EA Industry Avg 2021 Estimate (Next Fiscal Year $7.530 $22.379 Return on Assets 6.86% 0.67% 10.94% Return on Equity "YOY denotes Year Over Year measurements -5.68% Return on invested Capital 9.34% -9.97% Operating Ratios (Fiscal Year This company is more effective than its industry peers al deploying is available resources. As a result, the company has earned a Relum on Equily of 10.94% which is better than the industry average. Description EA Industry Avg Operating Expense $4.58B $19.718 General Information Assat Turnover 0.46% 0.67% Inventary Tu mover 35.62% Fiscal Year Ends 3/31/2021 32 56 Most Recent Quarter 06/30/2021 Receivable Days Effective Tex Tumover 17.70%. 11.54% Market Capitalization $38.35B Number of Employees 11.000 Executives Main Office Redwood City, California UNITED STATES Security Profile Activision Blizzard, Inc. ATVI: NASDAQ Enter a ticker symbol or security Search Securities Recently viewed: TWO TIWFC BWAIICE Bid x Size Ask x Size Last Price $76.05 Day's Change -$0.35 -0.46% As of 10/18/2021 11:32:03 AM ET | Nasdaq Basic Day's Volume Day's Range 1,814,564 $75.24 - $76.21 $ $76.05 x 300 X $76.06 x 399 My Total Value: $1,896.58 | Quantity: 25 View Position Details Add To Watchlist | Compare Set Alert Trade Overview Balance Sheet Income Statement Cash Flow SEC Filings Profitability (Fiscal Year) Financial Strength (Fiscal Year Description ATVI Industry Avg. Description ATM Industry Avg. Gross Pront Margin 71.92% 37.10% Quick Ratio 3.4% 2.0X 35.00% 1.36'. 3.4% 2.1x Opereting Mergin Profit Margin 27.16% 1.98% Current Ratio Long Term Debl Equity / Debl/Assets 25.46% 84.33% 16.85% 36.47% This company's continuing operations are more praftable than those of many other companies in its industry, resulling in an Operating Margin that is above the everage. This success is carried to the bottom line, where the Net Prof Margin is, similarly, above average. Price Esmings (TTM) 28.6x 71.2x Price/Sales Last TRI 8.3% 9.9% Price Book Last OTR) 4.8% 13.7% Dividend (ATVI) (Last Recurring Dividend Annualized Price/Cash Flow Last OTR) 29.1% 66.9% Description ATV Industry Avg. Dividend Yleld 0.62%. 0.37% Revenue Fiscal Year) Payout Rallo (Fiscal Year 14.52% 8.27% Description ATVI Industry Avg Revenue $0.09B $21.600 Annual Didend 50.47 $0.72 ATVI pays an annual dividend of SO 47 and, at its current price yields 0.62% which is above the Entertainment industry average of 0.37%. Additionally, this company is one of the few in the industry that pays e dividend. However, investors seeking Income may be able to find better opportunities as the average slock in the S&P 500 Index ylelds 1.34%. Revenue/Share 10.4% 28.5x Quarterly Revenue Growth (YOY) 25.41% 23.96% EBITDA $3.348 S5.368 Management Effectiveness (Fiscal Year Quarterly Earnings Growth (YOY) 49.86% -36.67% Description ATVI Industry Avg 2021 Estimate (Next Fiscal Year $8.80B $22.378 Return on Assets 10.23% 0.67% 15.78% Return on Equity "YOY denotes Year Over Year measurements -5.68% Return on invested Capital 12.72% -9.97% Operating Ratios (Fiscal Year This company is more effective than its industry peers al deploying is available resources. As a result, the company has earned a Relum on Equily of 15.70%, which is better than the industry average. Description ATVI Industry Avg Operating Expense $5.268 $19.718 General Information Assat Turnover 0.38% 0.67% Inventary Tu mover 141.94% 35.62% Fiscal Year Ends 12/31/2020 43 56 Most Recent Quarter 06/30/2021 Receivable Days Effective Tex Tumover 15.02% 11.54% Market Capitalization $59.42B Number of Employees 9.500 Executives Main Office Santa Monica, California UNITED STATES Company Summary Activision-Blizzard is a leading US-based publisher and distributor of interactive software games for all major platforms. The company is headquartered in Santa Monica, CA, but has studios and offices globally. Key franchises for the company include Activision's Call of Duty, and Skylanders, Blizzard's Overwatch, World of Warcraft, Diablo and Starcraft and King's Candy Crush. Electronic Arts is one of the largest independent publishers of interactive games for all platforms, including game consoles, PC's and mobile devices. The company is realizing a greater percentage of revenues from digital platforms, which may enhance margins and lead to more sustainable revenue growth. Key franchises for the company include Madden, FIFA, Need for Speed, Battlefield, Star Wars Battlefront, Mass Effect, Dragon's Age, and The Sims. 1. Using the Merrill Lynch profile sheets provided in the Module, fill in the chart below. 2. Based on the completed chart, how do ATVI and EA compare with the Industry averages? Explain in a couple of paragraphs. 3. Which stock, or both, is undervalued based on the financial data? Explain. 4. Finally, if you had $10,000 to invest right now, which stock (or both) would you invest in and why? Performance Measure Activision Blizzard ATVI Electronic Arts -EA Industry Average Gross Profit Margin Operating Margin Profit Margin ROA ROE Quick Ratio Current Ratio P/E ratio LT Debt/Equity Qtrly Earnings growth (YOY) Security Profile Electronic Arts Inc. EA: NASDAQ Enter a ticker symbol or security Search Securities Recently viewed: WFCINTDOYI SONYI ATVITTWO Last Price Day's Change Bid x Size +$0.83 +0.61% $135.55 x 200 Ask x Size $135.58 x 3 As of 10/19/2021 11:56:47 AM ET Nasdaq Basic | Day's Volume Day's Range 476,281 $134.20 - $135.73 $135.58 My Total Value: $1,894.34| Quantity: 14 View Position Details Add To Watchlist | Compare Set Alert Trade Overview Balance Sheet Income Statement Cash Flow SEC Filings Profitability (Fiscal Year) Financial Strength (Fiscal Yean Description EA Industry Avg. Description EA Industry Avg. Gross Pront Margin 73.07% 37.10'. Quick Ratio 2.4x 2.0X Operating Mergin 19.10% 1.36'. 2.4x 2.1x Profit Margin 14.79% 1.98% Current Ratio Long Term Debl Equity / Debl/Assets 26.51% 84.33% 16.21% 36.47% This company's continuing operations are more profitable than those of many other companies in its industry, resulling in an Operating Margin that is above the everage. This success is carried to the bottom line, where the Net Prof Margin is, similarly, above average. Price Esmings (TTM) 61.9x 71.2x Price/Sales Last TRI 7.2x 9.9% Price Book Last OTR, 5.3 13.7% Dividend EA) (Last Recurring Dividend Annualized) Price/ Cash Flow Last OTR) 29.Ax 66.9% Description EA Industry Avg. Duidend Yield 0.50% 0.37" Revenue Fiscal Year) Payout Rallo (Fiscal Yean 17.79% 8.27% Annual Dividend EA 50.68 $0.72 Description Industry Avg Revenue $5.86B $21.600 Revenue/Share 19.4% 28.5x EA pays an annual dividend of SO.68 and, at its current price yields 0.50% which is above the Entertainment industry average of 0.37%. Additionally, this comparty is one of the few in the Industry that pays a dividend. However, Investors seeking Income may be able to find better opportuntles as the average stock in the S&P 500 Index ylelds 1.34% Quarterly Revenue Growth (YOY) 3.53% 23.96% EBITDA $1.268 S5.368 Management Effectiveness (Fiscal Year Quarterly Earnings Growth (YOY) 43.72% -36.67% Description EA Industry Avg 2021 Estimate (Next Fiscal Year $7.530 $22.379 Return on Assets 6.86% 0.67% 10.94% Return on Equity "YOY denotes Year Over Year measurements -5.68% Return on invested Capital 9.34% -9.97% Operating Ratios (Fiscal Year This company is more effective than its industry peers al deploying is available resources. As a result, the company has earned a Relum on Equily of 10.94% which is better than the industry average. Description EA Industry Avg Operating Expense $4.58B $19.718 General Information Assat Turnover 0.46% 0.67% Inventary Tu mover 35.62% Fiscal Year Ends 3/31/2021 32 56 Most Recent Quarter 06/30/2021 Receivable Days Effective Tex Tumover 17.70%. 11.54% Market Capitalization $38.35B Number of Employees 11.000 Executives Main Office Redwood City, California UNITED STATES Security Profile Activision Blizzard, Inc. ATVI: NASDAQ Enter a ticker symbol or security Search Securities Recently viewed: TWO TIWFC BWAIICE Bid x Size Ask x Size Last Price $76.05 Day's Change -$0.35 -0.46% As of 10/18/2021 11:32:03 AM ET | Nasdaq Basic Day's Volume Day's Range 1,814,564 $75.24 - $76.21 $ $76.05 x 300 X $76.06 x 399 My Total Value: $1,896.58 | Quantity: 25 View Position Details Add To Watchlist | Compare Set Alert Trade Overview Balance Sheet Income Statement Cash Flow SEC Filings Profitability (Fiscal Year) Financial Strength (Fiscal Year Description ATVI Industry Avg. Description ATM Industry Avg. Gross Pront Margin 71.92% 37.10% Quick Ratio 3.4% 2.0X 35.00% 1.36'. 3.4% 2.1x Opereting Mergin Profit Margin 27.16% 1.98% Current Ratio Long Term Debl Equity / Debl/Assets 25.46% 84.33% 16.85% 36.47% This company's continuing operations are more praftable than those of many other companies in its industry, resulling in an Operating Margin that is above the everage. This success is carried to the bottom line, where the Net Prof Margin is, similarly, above average. Price Esmings (TTM) 28.6x 71.2x Price/Sales Last TRI 8.3% 9.9% Price Book Last OTR) 4.8% 13.7% Dividend (ATVI) (Last Recurring Dividend Annualized Price/Cash Flow Last OTR) 29.1% 66.9% Description ATV Industry Avg. Dividend Yleld 0.62%. 0.37% Revenue Fiscal Year) Payout Rallo (Fiscal Year 14.52% 8.27% Description ATVI Industry Avg Revenue $0.09B $21.600 Annual Didend 50.47 $0.72 ATVI pays an annual dividend of SO 47 and, at its current price yields 0.62% which is above the Entertainment industry average of 0.37%. Additionally, this company is one of the few in the industry that pays e dividend. However, investors seeking Income may be able to find better opportunities as the average slock in the S&P 500 Index ylelds 1.34%. Revenue/Share 10.4% 28.5x Quarterly Revenue Growth (YOY) 25.41% 23.96% EBITDA $3.348 S5.368 Management Effectiveness (Fiscal Year Quarterly Earnings Growth (YOY) 49.86% -36.67% Description ATVI Industry Avg 2021 Estimate (Next Fiscal Year $8.80B $22.378 Return on Assets 10.23% 0.67% 15.78% Return on Equity "YOY denotes Year Over Year measurements -5.68% Return on invested Capital 12.72% -9.97% Operating Ratios (Fiscal Year This company is more effective than its industry peers al deploying is available resources. As a result, the company has earned a Relum on Equily of 15.70%, which is better than the industry average. Description ATVI Industry Avg Operating Expense $5.268 $19.718 General Information Assat Turnover 0.38% 0.67% Inventary Tu mover 141.94% 35.62% Fiscal Year Ends 12/31/2020 43 56 Most Recent Quarter 06/30/2021 Receivable Days Effective Tex Tumover 15.02% 11.54% Market Capitalization $59.42B Number of Employees 9.500 Executives Main Office Santa Monica, California UNITED STATES Company Summary Activision-Blizzard is a leading US-based publisher and distributor of interactive software games for all major platforms. The company is headquartered in Santa Monica, CA, but has studios and offices globally. Key franchises for the company include Activision's Call of Duty, and Skylanders, Blizzard's Overwatch, World of Warcraft, Diablo and Starcraft and King's Candy Crush. Electronic Arts is one of the largest independent publishers of interactive games for all platforms, including game consoles, PC's and mobile devices. The company is realizing a greater percentage of revenues from digital platforms, which may enhance margins and lead to more sustainable revenue growth. Key franchises for the company include Madden, FIFA, Need for Speed, Battlefield, Star Wars Battlefront, Mass Effect, Dragon's Age, and The Sims. 1. Using the Merrill Lynch profile sheets provided in the Module, fill in the chart below. 2. Based on the completed chart, how do ATVI and EA compare with the Industry averages? Explain in a couple of paragraphs. 3. Which stock, or both, is undervalued based on the financial data? Explain. 4. Finally, if you had $10,000 to invest right now, which stock (or both) would you invest in and why? Performance Measure Activision Blizzard ATVI Electronic Arts -EA Industry Average Gross Profit Margin Operating Margin Profit Margin ROA ROE Quick Ratio Current Ratio P/E ratio LT Debt/Equity Qtrly Earnings growth (YOY)