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Zynga, Inc. Message Board

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  • tresjoli103 tresjoli103 Feb 8, 2012 12:57 PM Flag

    ZNGA to Open @ $11 tomarrow

    loStrong Buy 2 0 0 0
    Buy 3 0 0 0
    Hold 4 0 0 0
    Underperform 1 1 0 0
    Sell 0
    looks like a buy to me

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      For ZNGA to become fairly priced in terms of growth (EPG=1, at the most), the company needs to TRIPLE its current annual earnings growth, which currently stands at 114%. Put differently, ZNGA needs to show a sensational (and obviously unsustainable) earnings growth of 342% per annum.

      Reality Vs. Dreamland
      Can any of these companies maintain the growth rates previously mentioned? History provides us with a very straightforward answer to that question.

      Carol J. Loomis, in her article, "The 15% delusion", clearly states that maintaining such high growth for years is on the verge of impossible. In particular, when checking per-share growth for the largest 150 companies over a two-decade period, it appears that the number of companies who were successful in performing that task was very, very small.

      "Though history shows how difficult it is for large companies to hit a 15% target in earnings over any extended period, there remains no scarcity of executives willing to assume they can do it".

      simply put if Large co.'s cant maintain 15% how the hell is zynga suposed to do over 300%...its doomed from the start....

      • 1 Reply to nmbvua
      • in a nuttshell the gambel or bet here is if you think zanga can get 3 customers for every 1 they have now this year and every year forward go long otherwise if you dont go short... cause thats what the numbers boil down to...I dont think FB can grow that much nor do they claim to even plan to try to so there's your answer. thats why i'm short....

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