Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Zynga (ZNGA - Free Report) closed at $7.60, marking a -0.78% move from the previous day. This change lagged the S&P 500's 0.95% gain on the day.

Prior to today's trading, shares of the maker of "FarmVille" and other online games had lost 13.25% over the past month. This has lagged the Consumer Discretionary sector's loss of 0.92% and the S&P 500's loss of 1.87% 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 $0.06 per share, which would represent year-over-year growth of 300%. Our most recent consensus estimate is calling for quarterly revenue of $665.9 million, up 6.04% from the year-ago period.

ZNGA's full-year Zacks Consensus Estimates are calling for earnings of $0.35 per share and revenue of $2.81 billion. These results would represent year-over-year changes of +400% and +23.91%, respectively.

Investors might also notice recent changes to analyst estimates for ZNGA. Recent revisions tend to reflect the latest near-term business trends. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZNGA currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, ZNGA is currently trading at a Forward P/E ratio of 21.71. Its industry sports an average Forward P/E of 21.63, so we one might conclude that ZNGA is trading at a premium comparatively.

The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 170, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.


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