Analysts at National Alliance Securities projected that Zynga Inc (NASDAQ:ZNGA) is poised to disappoint investors with its first quarter earnings result on Wednesday, April 24, around 2:00 PM Pacific Time.

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National Alliance Securities senior analyst, Mike Hickey, emphasized that the research firm continues to reduce its bullishness on the performance of the online video gaming company because of “extreme value destruction from an accelerated player fade” within its web business. The research firm believes that the situation could persist indefinitely.

Hickey noted that Zynga Inc (NASDAQ:ZNGA)’s medium term performance drivers such as mobile acceleration, operating cost reductions, next-gen web development, and emerging RMG were somewhat offset by continued Facebook platform weakness.

He emphasized that the bookings of the online gaming company for the first quarter will disappoint saying that current game experiences have limited engagement continuation. According to him,  National Alliance Securities does not have enough credible foundation to build a more positive conviction for Zynga Inc (NASDAQ:ZNGA) because of lack of visibility for upcoming game releases and data on current game performances over excessive departures of its developers/executives.

For the first quarter, the research firm estimated that Zynga Inc (NASDAQ:ZNGA) will report $210.5 million bookings, a 36 percent decline compared with its bookings in the same period last year, and 19 percent lower than its booking in the fourth quarter of 2012.  Its non-GAAP net loss is expected to be approximately $29.5 million and non-GAAP loss of -$0.04 per share.

Hickey believes that Zynga Inc (NASDAQ:ZNGA) has limited product/financial catalysts in the first quarter because of an expectation of fewer games. He pointed out that the company needs new games to maintain player engagement in order to monetize effectively.

According to him, the research firm remains bullish on the company’s power of the network effect, but he acknowledged the fact that its mobile network is likely over indexing casual/low or non-paying players.  Hickey thinks that the company will “ambitiously map development resources to opportunities within the mid-core market,” which will effectively diminish the potential power of the network effect that could drive higher marketing expense.

Hickey noted that Zynga Inc (NASDAQ:ZNGA)’s mobile segment demonstrated sequential weakness saying its sequential mobile daily active users (DAU) declines and limited sequential mobile bookings growth. According to him, the company’s mid-core ambitions will likely be challenged by seemingly more demographic relevant mobile market and competitors with stronger development expertise/IP.

National Alliance Securities maintained its valuation for the shares of Zynga Inc (NASDAQ:ZNGA) at 1.7x sales multiples, reflecting weakness from web and limited mobile traction over comparably less near-term game releases. The research firm estimated that the company will achieve $875 million bookings for the fiscal 2013, which serves as the basis for its market perform rating and $3.25 price target.