Zynga Inc (NASDAQ:ZNGA) has been upgraded to Rank 1, which means a “strong buy”, by Zacks Investment Research. In a note issued on July 10, Zacks notes that Zynga is a good option to invest in with year to date return on the stocks at 41.8 percent along with positive estimate revision trend.
Earlier this month, Evercore Partners raised the price target on the game maker’s stock from $2.50 to $3.00, and currently has an “underweight” rating on the stock.
Reasons for the upgrade
Zacks has increased the rating of the stock following the recent shuffle in the top management. Zynga Inc (NASDAQ:ZNGA) turned to be unpredictable when it hired Don Mattrick, ex-head of Microsoft's Xbox division as the chief executive officer (CEO). Zynga’s founder Mark Pincus was replaced by new CEO Don Mattrick on July 8. Mark Pincus, the former CEO, will continue to hold the position of chief product officer and president of the Board.
Newly appointed CEO Don Mattrick has been involved in the development of games like EA franchises namely FIFA and the Sims. During his stay in Microsoft Corporation (NASDAQ:MSFT), Kinect Motion Technology was first released in the corporation. Don Mattrick is popular for his management style and outspoken nature.
Don Mattrick will be responsible for the everyday operation of Zynga Inc (NASDAQ:ZNGA), whereas Mark Pincus will lead the development of games and handle global strategic decisions with the support of a new executive committee.
According to Zacks, Don Mattrick has got real a challenge to revive Zynga Inc (NASDAQ:ZNGA), but the increase in stock prices after the news of his appointment has revealed the investor’s confidence in the company.
Estimates for Zynga
In the last four quarters, Zynga Inc (NASDAQ:ZNGA) performed better than the Zacks consensus with average beat of 36.2 percent. Zynga acquired Spooky Cool lab, which again sets the positive momentum for the stock. Through acquisition, Zynga will be able to acquire market share in the online casino gaming market.
For year 2013, Zacks estimates remain stable and projects losses of 17 cents per share over the last 60 days. This estimate is better than the previous estimate, which was of 30 cents loss posted by Zynga Inc (NASDAQ:ZNGA) in 2012.