Electronic Arts (NASDAQ 🙂 suffered another major setback this week amid increasing pressures in the gaming sector.

Battlefield 2042, the highly anticipated game from EA, is being delayed. EA blamed the COVID-19 epidemic for the delays in Battlefield 2042.

Unexpected delays to launch on October 22 may make it less likely that the launch will be a success. An open beta test, which is planned in the months leading up to launch on November 19, could help to push the launch forward.

In the midst of market volatility, which was mainly focused on tech stocks, EA decided to delay the stock’s IPO. However, it has not done anything so far in 2021.

However, I remain bullish on this stock. (See Insiders’ Hot Stocks on TipRanks)

EA: Still Steady

Electronic Arts is one of the more stable players on today’s gaming scene.

The steady flow of cash comes from regular releases like the NHL 22 FIFA 22 or non-annual but more frequent titles such Battlefield and UFC.

The firm’s cash flows are easier to forecast because of how often these releases occur. EA is a solid cash cow, thanks to the smash-hit Apex Legends (F2P), which has a potentially long shelf life.

Many are still questioning the value of the firm’s 6.4-fold sales multiple despite their predictable titles. Even with the 2021 flatlining, the stock remains expensive and may need more time to increase its multiple after the Battlefield 242 delay announcement.

Additionally, other titles in development could be at risk if pandemics cause delays to such an important title. Worse, do you run the risk that a buggy launch is as disastrous for Cyberpunk 2077 than it was for CD Projekt Red’s?

EA will need more than Apex Legends to keep its stock up as the market conditions get worse. The COVID will end, so people won’t be playing controllers anymore. This could make the Battlefield delay all the more inconvenient.

Titles due for Refresh

EA’s fairly predictable release schedule does have its downsides. The annual titles could become boring over time, especially if they are not updated regularly.

EA’s Annual Releases will be freshened up with the release of a number of new consoles. There could be a lot more demand than anticipated for next-generation EA games.

The Frostbite Engine is a hub for many of these titles, which could make the year brighter than what investors anticipate, particularly once the chips shortage has cleared and average consumers are able to finally own the latest Xbox or Playstation.

In fact, there is a possibility that more people will have consoles attached to their TVs after Battlefield 2042 opens. This could be either in the late November or close to Christmas. Even though most people see it negatively, the delay might actually be a plus.

Wall Street Take

According to TipRanks’ analyst rating consensus, EA stock comes in as a Strong Buy. There are three Hold recommendations out of the 18 analysts ratings.

The average EA price target is $171.43. The price target for analysts can be as low as $148 or high at $200.

Bottom line

EA does a good job of creating a balance between its often released franchises and newer, but more risky, franchises such as Apex Legends.

EA Stock could benefit from big bets on innovative titles that are creative and original.

While licensed games such as sports titles or other franchises like Battlefield can be extremely lucrative, it may not provide enough excitement to sustain users’ interest once the economy recovers.

EA has announced next-generation consoles. This will boon EA’s annual titles and make them fresher than ever.

Disclosure: Joey Frenette held shares in Activision Blizzard (NASDAQ) at publication.

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