Zynga Inc (NASDAQ:ZNGA) announced this week that it would cut over 500 more jobs. The company also pre-announced soft second-quarter results, and analysts Justin Post and Ryan Gee at Bank of America Merrill Lynch weighed in on these announcements in a report today, lowering their price objective for the stock.

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Concern Over Zynga’s Offerings

In their research note, the analysts expressed concern that the company’s current games are losing users and that it hasn’t offered much information on upcoming games. Zynga Inc (NASDAQ:ZNGA) has been hanging its hat on the success of online gambling, but AppData indicates that poker users have declined 25 percent quarter over quarter. In reference to online poker, Zynga did say that user fraud is a headwind it’s dealing with in the second quarter.

Other offerings from the gaming company are also causing concern. Words with Friends is down 30 percent quarter over quarter, while the two new mobile games Draw Something 2 and Running with Friends aren’t making mobile game charts.

The BAML analysts believe that the company’s second quarter launches of War of the Fallen and Battlestone might not be “meaningful” to its second quarter bookings. They said the only Zynga game which appears to be doing well is Farmville.

Zynga’s Reduced Estimates

While Zynga Inc (NASDAQ:ZNGA) did reaffirm its margin guidance of between 0 percent and 10 percent, it didn’t provide an outlook for its earnings before interest, taxes, depreciation and amortization (EBITDA) or its bookings. BAML analysts believe the company’s bookings will still be under pressure in the second half of this year, although the game maker’s cost cutting measures may enable it to at least break even.

The analysts lowered their bookings estimate for the year to $786 million and their earnings per share estimate to a loss of 4 cents per share. They said if Zynga Poker and its web bookings stabilize in the second half of this year or if the company’s new games begin to gain traction, it could become EBITDA positive next year.

Staying Neutral On Zynga

The analysts are maintaining their neutral rating on shares of Zynga Inc (NASDAQ:ZNGA), although they lowered their price objective on the stock to $3.60 per share from $3.80 per share because of the lower estimated annual poker bookings.

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