Zynga has been assigned a Neutral rating by Piper Jaffray analysts, who gave the game maker a price target of $3 in a research note to investors on Sunday morning. On Friday, Zynga shares closed up 2.14%, and year to date, the stock is up by over 5%.
Zynga plans to lower costs
During the recent earnings call, Zynga announced plans to cut its workforce by approximately one-fifth to bring down costs and turn around gradually from the red that has loomed since Zynga’s affair with Facebook came to an end. Post-workforce cuts, only 1,600 employees will remain in the company, which a drop from the company high of 3,400.
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Various other rating firms have released their verdicts on Zynga in recent weeks. Analysts at Benchmark Co. maintained their Hold rating on the stock and assigned a price target of $2.54 in a research note on May 10. Vetr analysts dropped their rating from Buy and set a price target of $3.34 in a research note to investors on Thursday. Jefferies analysts assigned a Buy rating on the stock and increased their price target from $4.50 to $5 in a research note to investors on Thursday. Separately, Janney Montogomery Scott increased its price target on Zynga from $2.50 to $2.75 and assigned it a Neutral rating in a research note to investors on Thursday. Presently, Zynga has a consensus rating of Hold, and a consensus price target of $3.44.
Will the recent changes help?
Analysts at Barclays maintained their Equal Weight rating on the game maker and assigned it a price target of $3 in a research note to investors on Sunday. The analysts mentioned that the cost reduction efforts are progressing, which is good to see, but for the company “to sustainably re-rate higher,” upcoming games should deliver, which is a difficult factor to predict as of now.
Another research firm, Credit Suisse, assigned an Under Perform rating to the stock with a price target of $2.92 in a research note to investors on May 10. Credit Suisse analysts mentioned that they are expecting Zynga’s bottom line to rise on the back of the recent changes announced. The report further said that they are waiting to see whether or not Zynga’s development efforts and the upcoming game releases will effect P&L significantly.