The video game stock has been a laggard - but fund managers and analysts say it will bounce back soon.

By Mina Kimes, writer

Pittsburgh Steelers players Ike Taylor, left, and Santonio Holmes play a game of "Madden NFL 10."

Once a blazing hot tech stock, Electronic Arts (ERTS), the maker of "Madden" and "Rock Band," is badly in need of a restart. The video game company's shares have sunk 63% over the last three years while the NASDAQ has been flat. Sales growth slowed after EA failed to anticipate the popularity of the Nintendo Wii. Management insists that a turnaround is underway -- but a series of earnings misses have undermined their credibility, and investors shunned the stock during last year's bull market.

Yet despite the company's underwhelming performance, some fund managers think a recovery is around the corner. "We think it's worth significantly more than it's trading at," says Christian Andreach, one of the managers of the $1.3 billion Manning & Napier Equity Fund, which has beaten 97% of its peers over the last decade. "Very few people are giving this company any credit."

The stock's 2011 price to earnings ratio of 31 doesn't look cheap, but it was trading at 140 times earnings just three years ago. Harry Rady, CEO of Rady Asset Management, says that, given the company's $1.1 billion cash hoard, it would become an acquisition target for big media companies or private equity firms if shares fell further. "The company could be LBO'd very easily," he says.

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