Zynga, which will release its earnings report on Thursday, witnessed a 2.2% rise in short interest for the month of January
Zynga witnessed a 2.2% rise in short interest for the month of January. Short interest in the game maker climbed from the Jan. 15 total of about 68.8 million shares to about 70.4 million shares as of Jan. 30.
4Q earnings preview
Zynga will release its fourth-quarter earnings report on Thursday. For the third quarter, the game maker posted a revenue decline of 13% and a 16% decline in its monthly active user base.
Despite the challenges the company faces, its mobile franchise and bookings are looking impressive. This, along with the success of the new Words With Friends game, is expected to drive growth for the company going forward, says a report from Forbes.
Zynga’s margin will again be tested in the fourth quarter, owing to a rise in marketing and R&D expenses primarily due to the development and the launch of new games. Zynga has been making efforts to get back on the growth track by focusing more on its core franchises and partnering with leading brands for new games.
During the earnings call, investors and analysts will be looking for more details on these strategies to get an idea of how 2015 could turn out for the game maker.
Analysts ratings on Zynga
Many analysts have come out with their verdict on Zynga in recent months. In a research note on Jan. 20, Zacks upgraded its rating on Zynga from Neutral to Outperform and set a price target of $2.90 on the game maker. Jefferies Group upgraded the game maker from a Hold to a Buy rating and increased its price target from $2.48 to $4.50 in a note issued on Nov. 11. Analysts at Benchmark Co., in a note issued on Nov. 10, lowered their price target to $2.45. On Nov. 7, analysts at Credit Suisse reiterated their Underperform rating with a price target of $3.44. Overall, Zynga has a consensus rating of Hold and an average price target of $3.72.
On Tuesday, Zynga shares closed up 1.82% at $2.80, while year to date, the stock is up by over 5%. Zynga stock was down almost 20% in 2014 due to the decline in the user base, rising losses and lack of new games.