Zynga Inc (NASDAQ:ZNGA) has not been stable in 2013. The company has flip-flopped on strategies, it’s seen a massive earnings decline, and its future existence, as well as the future existence of its core market, has been questioned many times. On Thursday afternoon, the company gave answer to its critics. It released an earnings report that was much better than expected. Shares in the firm have risen by more than 10 percent as a result.

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Nobody is betting on Zynga Inc (NASDAQ:ZNGA) to set the world on fire just yet. The company’s future is not certain by any means, but its results did contain some meaningfully positive numbers. An analyst report on the earnings, from Canaccord’s Michael Graham, put a price target of $4 on the shares and rated them at Hold.

Zynga at the core

The report showed that the company managed to keep both core users and core games performing reasonably well, but the company’s marginal users and games are still losing business. That means that the company is increasingly reliant on a handful of titles that have performed strongly. The company’s two Farmville titles and Zynga Poker now account for 59 percent of its business.

There’s an upside and a downside to this. It means that some of the games that Zynga Inc (NASDAQ:ZNGA) offers have good sticking power. It also means that the company’s revenues will shrivel up if the popularity of any of those games declines.

Zynga valuation

One factor is keeping Zynga Inc (NASDAQ:ZNGA) share value up more than any of the others combined. The company still has around $2 per share in cash. That puts an absolute floor on the value of the company, and insulates some of the shocks the company could see from changes in the market.

Zynga still has a couple of strong brands, and it still has a certain amount of talent. Alongside its cash reserves, these assets mean that the company is far from dead right now. That doesn’t mean it’s healthy, however. The company’s core businesses are still shedding revenue.

Zynga Inc (NASDAQ:ZNGA) is not in a strong position, but it is in a more stable one than analysts previously thought. What investors really need to see is strong management and a worthwhile strategy. That has to come from CEO Don Mattick. If it doesn’t arrive, shares may see declines in the months ahead.