Zynga Inc. is set to report third-quarter 2016 results on Nov 2. Last quarter, the company delivered in-line earnings. On an average, Zynga has delivered a positive earnings surprise of 35.00% over the last four quarters.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Zynga has been seeing strength in the mobile game market. In addition, its cost cutting initiatives is a positive. We expect the top line to be driven by its popular games like Words With Friends and Poker. Even CSR Racing 2, which was released at the end of the second quarter, is expected to be an important growth driver.
However, the company has been seeing a slowdown in its user growth for a while, which remains a major concern. Moreover, a slowing web business along with intensifying competition from the likes of Glu Mobile , Electronic Arts and Nintendo’s Pokémon Go remain concerns.
For the third quarter of 2016, the company expects revenues in a range of $170 million to $180 million.
Earnings Whispers
Our proven model does not conclusively show that Zynga is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Zynga has an Earnings ESP of -100.00% as the Most Accurate Estimate stands at a loss of 4 cents while the Zacks Consensus Estimate is pegged at a loss of 2 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Zynga has a Zacks Rank #3, which when combined with a negative ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks that, as per our model, also have the right combination of elements to post an earnings beat this quarter:
Stratasys Ltd. (SSYS - Free Report) with an Earnings ESP of +41.67% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inovalon Holdings, Inc. (INOV - Free Report) with an Earnings ESP of +50.00% and a Zacks Rank #2
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Zynga Inc. is set to report third-quarter 2016 results on Nov 2. Last quarter, the company delivered in-line earnings. On an average, Zynga has delivered a positive earnings surprise of 35.00% over the last four quarters.
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
Zynga has been seeing strength in the mobile game market. In addition, its cost cutting initiatives is a positive. We expect the top line to be driven by its popular games like Words With Friends and Poker. Even CSR Racing 2, which was released at the end of the second quarter, is expected to be an important growth driver.
However, the company has been seeing a slowdown in its user growth for a while, which remains a major concern. Moreover, a slowing web business along with intensifying competition from the likes of Glu Mobile , Electronic Arts and Nintendo’s Pokémon Go remain concerns.
For the third quarter of 2016, the company expects revenues in a range of $170 million to $180 million.
Earnings Whispers
Our proven model does not conclusively show that Zynga is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Zynga has an Earnings ESP of -100.00% as the Most Accurate Estimate stands at a loss of 4 cents while the Zacks Consensus Estimate is pegged at a loss of 2 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Zynga has a Zacks Rank #3, which when combined with a negative ESP, makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks that, as per our model, also have the right combination of elements to post an earnings beat this quarter:
Stratasys Ltd. (SSYS - Free Report) with an Earnings ESP of +41.67% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inovalon Holdings, Inc. (INOV - Free Report) with an Earnings ESP of +50.00% and a Zacks Rank #2
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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