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Online social games and advertising solutions provider Zynga Inc. (ZNGA) has agreed to acquire Chartboost. The latter is a mobile programmatic advertising and monetization platform.
Zynga is making this acquisition for a total cash consideration of $250 million and expects the transaction to close in Q3 2021.
Chartboost sees over 700 million monthly users and over 90 billion advertising auctions each month. Through the acquisition of this advertising powerhouse, Zynga will multiply its exposure to potential users of its games.
Zynga Chief Executive Officer Frank Gibeau said, “Chartboost is one of the most dynamic monetization and discovery platforms in mobile, and we could not be more excited to welcome their talented team to our company.” (See Zynga stock analysis on TipRanks)
Gibeau added, “By combining Zynga’s high-quality games portfolio and first-party data with Chartboost’s proven advertising and monetization platform, we will create a new level of audience scale and meaningfully enhance our competitive advantage in the mobile ecosystem.”
Zynga has also announced its Q1 results. The company saw a year-on-year jump in daily active users of 85%, and in monthly active users of 85%. Zynga’s topline increased by 68% year-on-year to $680 million, beating consensus estimates by $39.9 million.
On April 22, Jefferies analyst Andrew Uerkwitz initiated coverage on the stock with a Buy rating and a price target of $13 (28.2% upside potential).
Uerkwitz expects Zynga to be a beneficiary of growth and convergence in the mobile industry. He projects that Zynga will further benefit by developing and owning a majority of the industry’s monetization stack.
Consensus among analysts is that Zynga is a Strong Buy based on 15 Buys, 1 Hold, and 1 Sell. The average analyst price target of $13.38 implies 31.9% upside potential. That’s after the stock has seen a gain of around 33.1% over the past year.
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