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Zynga (ZNGA) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Zynga (ZNGA - Free Report) closed at $9.61, marking a +0.95% move from the previous day. This move outpaced the S&P 500's daily gain of 0.58%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 0.84%.

Prior to today's trading, shares of the maker of "FarmVille" and other online games had gained 20.35% over the past month. This has outpaced the Consumer Discretionary sector's gain of 8.28% and the S&P 500's gain of 2.12% in that time.

Investors will be hoping for strength from ZNGA as it approaches its next earnings release. On that day, ZNGA is projected to report earnings of $0.09 per share, which would represent year-over-year growth of 125%. Our most recent consensus estimate is calling for quarterly revenue of $674.64 million, up 55.66% from the year-ago period.

ZNGA's full-year Zacks Consensus Estimates are calling for earnings of $0.38 per share and revenue of $2.25 billion. These results would represent year-over-year changes of +3700% and +43.58%, respectively.

Investors might also notice recent changes to analyst estimates for ZNGA. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZNGA is currently a Zacks Rank #3 (Hold).

Investors should also note ZNGA's current valuation metrics, including its Forward P/E ratio of 25.3. This valuation marks a discount compared to its industry's average Forward P/E of 33.4.

Investors should also note that ZNGA has a PEG ratio of 1.44 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Gaming stocks are, on average, holding a PEG ratio of 1.26 based on yesterday's closing prices.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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