Zynga Inc Downgraded From Strong Buy To Buy

zynga earnings

Zynga has been downgraded by the equities researchers at Vetr, in a report issued on Monday. The Vetr analysts lowered their rating on game maker from Strong-Buy to Buy with a price target of $2.90.

Limited downside and upside

Last week, Zacks lowered its rating on the game maker from Buy to a Hold. And on July 14, Morgan Stanley initiated coverage on Zynga with an Equal-weight rating and a price target of $2.80. Morgan Stanley is impressed with the company’s ability to transition from gaming on social networking sites to the mobile gaming. However, analysts are concerned that the company is now at the mercy of new hits considering its popular franchises such as FarmVille, Mafia Wars, and Words With Friends are losing popularity. Though the analysts expect limited downside, they see little reason to give Zynga a more compelling rating and a higher price target.

A number of analysts have offered an opinion on Zynga in recent months. Sterne Agee CRT analysts reiterated their Hold rating on the game maker, in a note issued on May 14th. In a report on May 10th, Piper Jaffray reiterated uts Neutral rating on the stock with a price target of $3. Benchmark Co. reiterated a Hold on the game maker with a price target of $2.54, in a note May 10th. Presently, Zynga has an average rating of Hold and a consensus price target of $3.39.

Recent insider selling at Zynga

Zynga witnessed a couple of insider selling transactions last week. In a single transaction on July 16, Vice President, General Counsel, and Secretary Devang Shah offloaded 14,220 shares, constituting 7.42% of his stake, totaling $38,832. After the transaction, Shah is left with 177,520 shares worth approximately  $481,079.

Separately, CFO David Lee sold 17.14% of his stake or 11,747 shares for $32,069. The shares were sold in one transaction on July 19. After the sell, Lee is now left with 56,787 shares worth around $153,893, according to a filing with the SEC.

On Monday, Zynga shares closed down 2.21% at $2.65. Year to date, the stock is down almost 3% while in the last twelve months the stock is down over 13%. The game makers stock has a 52-week high of $3.19 and a 52-week low of $2.20.

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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 amanjain@valuewalk.com

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