Back to top

Image: Bigstock

Zynga (ZNGA) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest trading session, Zynga (ZNGA - Free Report) closed at $10.37, marking a +0.48% move from the previous day. This change outpaced the S&P 500's 0.15% loss on the day. Meanwhile, the Dow lost 0.07%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Investors will be hoping for strength from ZNGA as it approaches its next earnings release, which is expected to be February 10, 2021. The company is expected to report EPS of $0.09, up 125% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $674.64 million, up 55.66% from the prior-year quarter.

Any recent changes to analyst estimates for ZNGA should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ZNGA is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note ZNGA's current valuation metrics, including its Forward P/E ratio of 25.1. This represents a discount compared to its industry's average Forward P/E of 31.14.

We can also see that ZNGA currently has a PEG ratio of 1.43. 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. The Gaming was holding an average PEG ratio of 1.45 at yesterday's closing price.

The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 216, which puts it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow ZNGA in the coming trading sessions, be sure to utilize Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Zynga Inc. (ZNGA) - free report >>

Published in