Zynga Inc Medium And Long Term “Constructive”

zynga earnings

Zynga Inc (NASDAQ:ZNGA) is making a substantial effort to rebound from its current lows by executing its turnaround strategy on all fronts. UBS analysts Eric J. Sheridan, Vishal J. Patel and Timothy E. Chiodo, in a report dated June 10th, “remain constructive over both the medium & longer term.” The conclusion is based on a dinner conversation at E3 with Zynga CFO David Lee.

Booking guidance achievable

During the first quarter earnings report release, Zynga Inc (NASDAQ:ZNGA) anticipated second quarter bookings to be somewhere between $175-$195 million and analysts believe the form can comfortably achieve the target. Poker has achieved an average daily rank of #22 among the top grossing U.S. iPhone apps compared to 21st in the first quarter. On Android, the game has a ranking of 31 compared to 35 in the first quarter, indicating a stable position quarter over quarter.

Farmville 2 has average daily rank of 24 on the iPhone platform and 14 on Android since May 1. Analysts anticipate that the existing titles along wit the newh CSR Classic and Clumsy Ninja on Android will continue to move growth forward.

Zynga focusing on several initiatives

The firm’s management remains determined to implement initiatives such as performing better than the previous guidance for financial year 2014 even though investors are skeptical. The social gaming company is also making efforts to integrate Natural Motion technology and launch more titles for the mobile platform instead of just continuing primarily as a web gaming company. The game maker is also focusing on the “potential for operating leverage” based on revenue growth and cost cutting efforts.

The report suggested that the shares of the company may move above $10 if Zynga Inc (NASDAQ:ZNGA) is able to generate 2014 and 2015 revenue in the range of 8-15% more than the estimated forecast, and is able to engage a greater number of players as well successful new game launches. The price target is also likely to be achieved if the company’s upcoming titles for Android become a hit among tusers.

UBS analysts have placed a $6 12-month price target on Zynga Inc (NASDAQ:ZNGA), and assigned it a Buy rating.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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