Why Analysts Expect Less and Less From Zynga

Zynga Inc. (NASDAQ: ZNGA) reported its fourth-quarter financial results this past week, and analysts were not particularly happy with them. In fact, many analysts actually cut their price targets following the release of the earnings report.

24/7 Wall St. has collected these analyst calls and organized them into a montage, along with some highlights from the earnings report.

Zynga had no earnings and $186 million in revenue. The Thomson Reuters’ consensus estimates had called for no earnings on $178.67 million in revenue. In the same period of the previous year, Zynga reported no earnings and revenue of $182.35 million.

In the fourth quarter, bookings totaled $182 million, which was above the high end of the guidance range but flat year over year and up 3% sequentially. Mobile bookings were $134 million, or 73% of overall bookings, up 21% year over year and up 10% sequentially.

Average daily active users totaled 18 million, with 15 million coming from mobile. Average monthly active users totaled 68 million, with 55 million coming from mobile. Note that both of these numbers are lower than the same period from the previous year, as well as sequentially.
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A few analysts weighed in on Zynga following the earnings report:

• Cowen has a Market Perform rating and lowered its price target to $2.50 from $3.00.
• Credit Suisse has an Underperform rating and lowered its price target from $2.93 to $2.87.
• Goldman Sachs has a Neutral rating and lowered its price target to $2.60 from $3.00.
• Macquarie has a Neutral rating and cut its price target to $2.50 from $2.75.
• Piper Jaffray has a Neutral rating and lowered its price target to $2.50 from $3.
• UBS has a Buy rating and lowered its price target to from $3.50 $3.00.
• Wedbush lowered its price target to $4.25 from $5.50.

Shares of Zynga closed Friday at $1.83, with a consensus analyst price target of $2.96 and a 52-week trading range of $1.78 to $3.13.