For the past several months, I’ve been largely bearish on Electronic Arts Inc. (NASDAQ:EA).

EA stock was plagued during November and December by controversy regarding overpriced micro-transactions in its headline 2017 holiday title Battlefront II. The stock was also running up against some valuation barriers, while a dour holiday sales guide weighed on investor sentiment.

But ahead of the company’s holiday earnings report, due after the market closes on Tuesday (Jan. 30), I’m growing bullish on the name.

Here’s why.

Battlefront II Bounced Back

According to data from NPD, most of the damage done to EA’s Battlefront II was on the media front, not the consumer front.

Battlefront II was the second best-selling video game in December 2017 behind a Call of Duty game. Before you go and ask why Battlefront II wasn’t first, keep in mind that the wildly successful original Battlefront was also the second best-selling video game in December 2015 behind a Call of Duty game (go figure).

And Battlefront was wildly successful. EA sold 13 million copies by January 2016, and it didn’t expect to hit that mark until March.

Video Game Sales Soared

Moreover, it looks like the broad retail rally in December extended to include video game retailers. Console software sales rose 2% in December. That follows multiple Decembers in a row of declines, so 2017 was indeed the best holiday season for video game content publishers in recent memory.

Connecting the dots, we can see that the original Battlefront was a big hit as the number two selling video game in a down month for video game sales. But Battlefront II was the number two selling video game in an up month for video game sales. In other words, I think EA could report quite strong numbers for Battlefront II.

That would be huge for EA stock. The stock has been range bound for a while against the backdrop of a broad market rally because investors have been pricing in poor holiday numbers.

But if those holiday numbers are better than expected thanks to robust video game spending, EA stock could explode higher as investors play catch-up for not buying over the past several months.

EA’s Valuation Isn’t Extraordinary

Lastly, the valuation on Electronic Arts stock isn’t extraordinary at these levels.

EA stock does trade at 27.2 times fiscal 2017 earnings estimates for 15% compounded earnings growth potential into 2019. That 80%-plus premium does seem rich against the S&P 500‘s ~60% premium (22 times 2017 earnings estimates for 14% compounded earnings growth potential into 2019).

But this extended valuation is nothing new for EA stock. It’s five-year average forward earnings multiple is 21.7, more than 35% higher than the S&P 500’s five-year average forward multiple of 15.9.

Today, EA stock trades at 24.3 times forward earnings. The S&P 500 trades at 18.4 times forward earnings. So EA stock’s forward multiple is just 32% higher than the S&P 500’s multiple, below the five-year average.

That means this stock could benefit from healthy multiple expansion on a strong holiday earnings beat.

Bottom Line on EA Stock

Because video game sales just had a record holiday season, right now is a good time to be invested in video game stocks. Video game publishers will report robust holiday numbers over the next several weeks, and those numbers will inspire big rallies in video game stocks.

EA is no exception. Indeed, Electronic Arts could be one of the bigger winners because it’s been range bound for so long. If EA reports better-than-expected holiday numbers, this stock could soar as investors play catch-up.

All in all, I’m finally bullish on Electronic Arts stock. The company’s holiday quarter report could be the catalyst this stock needs to break out of its trading range.

As of this writing, Luke Lango was long EA.