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

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Zynga (ZNGA - Free Report) closed the most recent trading day at $6.38, moving -1.54% from the previous trading session. This change lagged the S&P 500's 1.02% gain on the day. At the same time, the Dow added 0.74%, and the tech-heavy Nasdaq lost 0.4%.

Coming into today, shares of the maker of "FarmVille" and other online games had gained 1.41% in the past month. In that same time, the Consumer Discretionary sector lost 6.46%, while the S&P 500 lost 0.91%.

Zynga will be looking to display strength as it nears its next earnings release. On that day, Zynga is projected to report earnings of $0.08 per share, which would represent year-over-year growth of 100%. Meanwhile, our latest consensus estimate is calling for revenue of $721.09 million, up 3.17% from the prior-year quarter.

ZNGA's full-year Zacks Consensus Estimates are calling for earnings of $0.40 per share and revenue of $2.82 billion. These results would represent year-over-year changes of +471.43% and +24.24%, respectively.

Investors might also notice recent changes to analyst estimates for Zynga. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Zynga currently has a Zacks Rank of #3 (Hold).

Investors should also note Zynga's current valuation metrics, including its Forward P/E ratio of 16.1. For comparison, its industry has an average Forward P/E of 18.45, which means Zynga is trading at a discount to the group.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 34% 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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