In the latest trading session, Zynga (ZNGA - Free Report) closed at $6.20, marking a +0.98% move from the previous day. This change outpaced the S&P 500's 0.86% gain on the day. At the same time, the Dow added 0.79%, and the tech-heavy Nasdaq gained 0.73%.
Coming into today, shares of the maker of "FarmVille" and other online games had lost 2.69% in the past month. In that same time, the Consumer Discretionary sector gained 2.57%, while the S&P 500 gained 1.94%.
ZNGA will be looking to display strength as it nears its next earnings release. In that report, analysts expect ZNGA to post earnings of $0.05 per share. This would mark year-over-year growth of 150%. Our most recent consensus estimate is calling for quarterly revenue of $416.85 million, up 55.97% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.25 per share and revenue of $1.55 billion, which would represent changes of +212.5% and +59.61%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for ZNGA. 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.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. ZNGA is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, ZNGA is holding a Forward P/E ratio of 24.4. This represents a premium compared to its industry's average Forward P/E of 22.62.
We can also see that ZNGA currently has a PEG ratio of 1.69. 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 industry currently had an average PEG ratio of 1.68 as of yesterday's close.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 214, which puts it in the bottom 17% 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.
To follow ZNGA in the coming trading sessions, be sure to utilize Zacks.com.