#3 Worst S&P Stock: Electronic Arts
Sector: Consumer Discretionary
Video game icon Electronic Arts (NASDAQ:EA) is caught in an untenable position this year. On one side, consumer spending continues to be battered by high unemployment — particularly among the younger folks that make up the majority of gamers. On the other is the mobile revolution as games move beyond consoles and hard copies, increasing the competition and eroding the dominance of Electronic Arts in the space.
The strange thing is that EA’s numbers still are strong. The company has seen five straight quarters of year-over-year earnings growth, and after some unprofitable years amid the Great Recession, its earnings have bounced back strongly.
Unfortunately, investors aren’t all that concerned with the present. It’s the fear of the future that has them worried about Electronic Arts. Shares are off 75% since pre-Lehman levels and have struggled to make any headway even since the company returned to profitability in 2011.