Media
Why Analysts Remain So Positive on Zynga Even After a 50% Surge
Published:
Last Updated:
Zynga Inc. (NASDAQ: ZNGA) may have pulled back from its highs in August, but the stock is still up close to 50% so far this year. The mobile and social video game maker has received more positive analyst coverage in 2019, and new phones and a slate of new titles seem to be driving more interest.
Stephens has added Zynga to its Best Ideas List in place of Electronic Arts Inc. (NASDAQ: EA). The firm expects mobile gaming to see a wave of consolidation in the coming six to 18 months, and Zynga is said to have seen more than its fair share of successful acquisitions.
Along with the positives from Gram Games and Small Giant Games, Stephens also sees the state of its current games portfolio making a very attractive risk-reward profile for investors.
While Zynga remains a very speculative name compared to more established large video game publishers, Stephens believes that the company deserves a premium valuation because its dominance in mobile gaming makes it the best-positioned company in the field.
The Stephens call’s timing also should stand out because this was just one day ahead of a presentation by Zynga Chief Executive Officer Frank Gibeau at the Goldman Sachs Communacopia Conference, shortly after the opening bell on Wednesday.
Zynga’s adjusted earnings of $0.17 per share in 2018 are shown to have an expected follow-up (from Refinitiv) of $0.23 per share in 2019 and then $0.27 per share in 2020. The revenues of $969.5 million in 2018 are projected to pop 56% to $1.52 billion in 2019 and then another 12% to $1.7 billion in 2020.
The call from Stephens, which was already formally at Overweight after it raised its target to $8.25 from $6.50 at the end of May, echoes a Wedbush Securities call from August in which that firm also added Zynga to its Best Ideas List. It also follows a raised guidance for 2019 when Zynga beat its earnings expectations back in July.
Zynga was trading up 1.6% to $5.97 on Tuesday, in a 52-week range of $3.32 to $6.65 and with a consensus target price of $7.36.
24/7 Wall St.Cash Back Credit Cards Have Never Been This Good
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
