With earnings around the corner, traders are cautious on Zynga, which is evident from the rise in short interest
Zynga witnessed a substantial increase in short interest for the month of January. On Jan. 15, short interest totaled to about 68.8 million shares, which is an increase of 2.2% from the Dec. 31 total of about 67.5 million. Around 9.2% of the company’s shares are sold short.
Will 4Q earnings help Zynga?
Zynga will announce its fourth quarter and full year 2014 results on Feb. 12 after the close of the markets. For the current fiscal year, analysts expect the company to post a loss of 1 cent per share. In its last quarterly results on Nov. 6, the game maker reported a loss of 1 cent per share, which was in line with the consensus estimate. Revenue for the quarter came in at $176.60 million, beating the consensus estimate of $171.70 million. For the same quarter last year, losses per share were 2 cents. Revenue was down 12.8% on a year over year basis.
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
Zynga has been subjected to a number analyst ratings recently. Zacks upgraded the game maker from Neutral to an Outperform rating, assigning it a price target of $2.90, in a research note to investors on Jan. 20. Jefferies analysts assigned a Buy rating to the stock, up from Hold previously, and raised their price target from $2.48 to $4.50 in a research note to investors on Nov. 11. Separately, analysts at Benchmark Co. dropped their price target on the stock to $2.45 in a research note to investors on Nov. 10. Credit Suisse maintained its Underperform rating on the stock, assigning it a price target of $3.44 in a research note on Nov. 7. Overall, Zynga has an average rating of Hold and an average target price of $3.69.
Zynga makes efforts to regain users
For quite some time, Zynga has been struggling to add new players to its platform and retain existing ones. To get back on the growth track, the game maker has been making continuous efforts by releasing new titles, and recently it rolled out World on Tour, which is an advanced version of the company’s new word game.
The new title from Zynga has taken inspiration from different existing games available on various platforms. Boggle served as an inspiration for the design of the game, and the style of phrase solving is inspired by the game show Wheel of Fortune. Candy Crush Saga inspired the style of level progression in the game.