Ask Matt: Is it game over for Electronic Arts?

Q: Is it game over for Electronic Arts?

A: Star Wars and video games. Those two things mixed together should be a license to print money. But investors are having second thoughts.

Shares of Electronic Arts (EA) fell $5.04, or 7%, to $64.75 Friday after the video-game publisher announced 26% higher quarterly revenue of $1.8 billion. The company’s “Star Wars Battlefront” game sold 13 million units, which was above expectations. The company also reported 50% higher adjusted profit of $1.83 a share, beating estimates.

So why aren’t the shares hitting a high score? The reason is that they’ve already been shooting the lights out as investors anticipated a solid fourth quarter. EA shares are up 26% over the past 12 months, a stellar performance when the Standard & Poor’s 500 is down 6%. Shares of EA are now trading for 25 times earnings over the past 12 months, which is more than 40% more expensive than the market. EA’s guidance for the future isn’t helping either. The company said it expects revenue in the current quarter to be $875 million - which is below the $887 million investors were anticipating, says S&P Capital IQ. Analysts still think you shouldn’t bail out and there’s plenty of upside left.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.