|Bid||7.11 x 36100|
|Ask||7.14 x 45900|
|Day's Range||7.06 - 7.17|
|52 Week Range||4.95 - 7.29|
|Beta (5Y Monthly)||0.35|
|PE Ratio (TTM)||178.25|
|Earnings Date||Apr 28, 2020 - May 03, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||7.72|
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if...
Shares of Zynga Inc. are up 12.9% in midday trading Thursday and on track for their biggest single-day percentage gain since 2014 if the gains hold through the close. The stock rose 23.6% on Jan. 31, 2014. Zynga's rally comes after the mobile-games maker beat earnings expectations the prior afternoon. Wedbush analyst Michael Pachter called it a "near perfect" fourth quarter for Zynga and reiterated his outperform rating on the stock. Jefferies analyst Alex Giaimo wrote that "despite increased investor caution heading into the print, Zynga posted impressive 4Q results and a safe [fiscal-year] guide that should help pull the stock out of the penalty box." He has a buy rating on the stock. The stock surge Thursday helped Zynga's stock crawl out of the red on a one-month and three-month basis. Shares have risen 6.7% over the past month and 6.4% over three, as the S&P 500 has posted respective gains of 2.9% and 8.6% over those spans.
Zynga (ZNGA) delivered earnings and revenue surprises of -33.33% and 3.78%, respectively, for the quarter ended December 2019. Do the numbers hold clues to what lies ahead for the stock?
Zynga Inc. shares were up 6% in after-hours trading Wednesday after the online-gaming developer reported fourth-quarter earnings that beat Wall Street expectations. Zynga said it lost $4 million, or 0 cents a share, in the quarter, compared with net income of $1 million, or 0 cents a share, in the year-ago fourth quarter. Revenue surged 63% to $404 million from $249 million a year ago. Analysts surveyed by FactSet had expected a loss of 3 cents a share on sales of $418 million. Zynga shares are up 31.5% over the last 12 months. The S&P 500 index has gained 22.1% the last year.
Zynga posted fourth-quarter financial results on Wednesday that blew past the company’s own guidance, but the game publisher cautioned that first-quarter results would fall short of Street estimates.
Mobile video gaming has turned into a big growth market, and as it has, shares of dominant mobile video game publisher Zynga (NASDAQ:ZNGA) have soared. In late 2018, this was a $3.50 stock. In early 2020, Zynga stock nearly touched $7.Source: JHVEPhoto / Shutterstock.com That's roughly 100% upside in just over a year. Can the red-hot rally continue?I have my doubts, mostly because there are some red flags with the Zynga growth narrative, and because the valuation underlying Zynga stock seems full when you consider those red flags.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAt the same time, though, there's a lot of excitement surrounding the mobile video game market at the current moment. I don't see that excitement fading in 2020, as strong product launches from Zynga should support continued bullishness. * 7 Stocks to Buy for February Contrarians Net net, I don't think ZNGA stock will rise much from here over the next few months. Nor do I think it will fall much. Instead, I think shares will simply fall flat. Zynga Has Red FlagsThe Zynga growth narrative has two major red flags.First, Zynga's big revenue growth year-to-date (revenues are up 40% year-to-date) is being driven entirely by share-of-wallet gains, and not at all by user growth. Daily active users of Zynga's games has plateaued around the 20 million mark for several quarters. Monthly active users has actually steadily dropped all year long from 78 million a year ago, to 67 million today. Meanwhile, average revenue per user has soared all year long, with the growth rate through the first three quarters averaging to over 40%.I don't think this is sustainable. Share-of-wallet gains are easy to come by this year because average spend per user is so low. As that number gets bigger, big growth will be harder to come by. At the same, there's huge and increasing competition for mobile content dollars. Think Netflix (NASDAQ:NFLX), Spotify (NYSE:SPOT), YouTube, etc. Considering that backdrop and that the laps are getting tougher, Zynga's average revenue per user growth rate will likely decelerate meaningfully in coming years.Users won't go higher, either. At its core, mobile video gaming is niche. Most consumers get their mobile entertainment fix through social channels like Facebook (NASDAQ:FB), Snap (NYSE:SNAP), and Tik Tok. Without user growth, the whole Zynga growth narrative is set for a big slowdown over the coming years.The second red flag is that revenue growth is being driven by big expense growth. Zynga's revenues are up 40% year-to-date, while expenses are up 60%. Profit margins are in retreat, and profits actually aren't ramping higher. So long as this remains the case -- and it may remain the case for a while considering Zynga's huge competition in the mobile channel -- Zynga stock will have a tough time justifying its valuation. Zynga Stock Seems Fully ValuedConsidering those two red flags, Zynga stock appears fully valued at current levels.According to Newzoo, the mobile gaming space is growing at a 10% clip. The market will likely sustain 10% growth thanks to gradual growth in average spend per user. In that market, Zynga is supported by an impressive content portfolio, the likes of which will allow it to maintain market share, even amid increasing competition from Apple (NASDAQ:AAPL) and others.Broadly, Zynga most reasonably projects as a 10% revenue grower over the next few years. In a best case scenario, Zynga will start moderating its spend as it gets bigger and expense growth rates will slow to below 10%. Profit margins will gradually move higher. So will profits, at a 10%-plus pace.Optimistically assuming so, my modeling pegs Zynga's 2025 earnings per share at 50 cents. Big time console video game publishers like Activision (NASDAQ:ATVI) and Electronic Arts (NASDAQ:EA) have historically averaged 20-times forward earnings multiples. Based on that multiple and a 10% annual discount rate, 50 cents in 2025 earnings per share supports a 2019 price target for ZNGA stock of just over $6.That's pretty much exactly where shares trade hands today, and we are still a week away from the end of fiscal 2019. Thus, for the moment, Zynga stock is trading near a best-case estimate for its fair value. Bottom Line on ZNGA StockZynga is a fine company. It just seems like investors got a bit too excited about growth prospects in the mobile gaming space. Yes, the mobile gaming market will continue to grow over the next few years. But, not by that much, and it will forever remain niche.Considering this reality, Zynga stock isn't all that attractively valued at current levels. The most likely path forward for shares over the next few months is sideways.As of this writing, Luke Lango was long NFLX, FB, SNAP, and ATVI. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for February Contrarians * 10 of the Top Franchise Stocks to Buy Now * 5 High-Yield Stocks With High Free Cash Flow Yields The post Zynga Stock Set For Exciting 2020, But May Fall Flat For a Few Months appeared first on InvestorPlace.
Zynga's (ZNGA) fourth-quarter 2019 results are likely to benefit from growth in its mobile live services supported by new and existing franchise games.
Zynga (ZNGA) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
In the daily bar chart of ZNGA, below, we can see that prices have pulled back this month to break below the rising 50-day moving average line and test the rising 200-day moving average line. The trading volume increased on the decline and the On-Balance-Volume (OBV) line turned lower. In the weekly bar chart of ZNGA, below, we can see that prices have broken below the rising 40-week moving average line.
At the end of the day, investors want to see returns. To accomplish this goal, seasoned Wall Street observers often turn to one strategy time and time again: growth investing. A solid growth play is a name that appears poised to not only grow at an above-average rate but also reward investors handsomely over the long run.Rolling up their sleeves, investors are pounding the Wall Street pavement in search of the tickers with impressive long-term growth prospects. However, having a target in mind is one thing, but zeroing in on these stocks primed for stellar gains in the coming years is another story entirely. This task also isn’t made any easier by the fact that 2019 saw the S&P 500 post its largest yearly gain since 2013, closing the year up 29% and starting out 2020 with an increase of 2%.Luckily, TipRanks, a company that tracks and measures the performance of analysts, can lend investors a hand. After using the platform’s Stock Screener tool during our own search, we were able to unmask 3 Buy-rated stocks flagged by the analysts for their strong long-term growth narratives. On top of this, each boasts substantial upside potential from the current share price.Here’s the full scoop.Global Blood Therapeutics Inc. (GBT)Global Blood Therapeutics is focused on developing treatments for underserved patient communities. With one therapy for sickle cell disease, a group of disorders that impacts hemoglobin in blood cells, already approved and another candidate for the disease in development, some analysts believe that its 94% gain in 2019 is just the beginning.Back in November, the company got some good news when the FDA granted its lead candidate, Oxbryta, accelerated approval for use in adults and children 12 years and older with sickle cell disease based on the results of the pivotal Phase 3 HOPE study. In the study, the drug was able to produce a rapid, potent and durable improvement in hemoglobin. With the ruling coming three months before the original PDUFA date, it’s no wonder Wall Street pros are excited. To top it all off, the label for Oxbryta is clean and broad, and the therapy can be administered alone or in combination with hydroxyurea.H.C. Wainwright’s Debjit Chattopadhyay does remind investors that the company is still required to continue the HOPE-KIDS 2 study to demonstrate decreased risk of stroke in children 2 to 15 years old. That being said, the four-star analyst expects the results to be similar to the HOPE Phase 3 program findings. “Additionally, because the HOPE-KIDS 2 study is enrolling patients as young as 2 years of age, data could be leveraged for label expansion to treat patients under 12,” Chattopadhyay commented.As the analyst sees the drug’s U.S. sales reaching $1.2 billion in 2024, it makes sense that he reiterated both a Buy rating and $150 price target. Should the target be met, shares could be in for a 105% twelve-month gain. (To watch Chattopadhyay’s track record, click here)Like Chattopadhyay, Wedbush analyst Liana Moussatos takes a bullish approach. With no price increases expected for three years and little to no competition anticipated from Novartis’ recently released ADAKVEO antibody treatment for sickle cell disease, the analyst thinks the market opportunity is large. Bearing this in mind, she bumped up the price target from $120 to $143 in addition to maintaining her bullish call. (To watch Moussatos’ track record, click here)In terms of the rest of the Street, a majority of analysts also see GBT as a Buy, 13 out of 16 to be exact. As a result, the consensus rating is a Strong Buy. Given the $102.20 average price target, the upside potential lands at 40%. (See Global Blood Therapeutics stock analysis on TipRanks) Zynga Inc. (ZNGA)Zynga is best known for being the force behind wildly popular games such as “Words With Friends”, “Empires & Puzzles” and “Merge Dragon”. After posting an impressive 70% climb in 2019, does the video game developer still have more fuel left in the tank?According to SunTrust Robinson’s Matthew Thornton, the answer is yes. In his initiation note, the analyst points out that the already large gaming market, which was worth about $83 billion in 2019, is still expanding, with a 5-year 2018-2023 CAGR of 9.9%. He tells investors the companies that can prosper in this competitive and fragmented environment will be those with platform-exposure to the market, publishers with unique franchises or IP, network scale and ability to fund and execute robust live services, pipeline development and M&A. Based on this, Thornton has high hopes for ZNGA.“ZNGA provides pure-play exposure to the large and fast growing global mobile gaming market with a growing (31% pro forma in 3Q19, driven by Merge Dragons and Empires & Puzzles) and diversified existing game portfolio and highly experienced management team and Board. In addition to a healthy existing portfolio, ZNGA has a strong pipeline (at least 7 games, including FarmVille, Harry Potter, Star Wars, Game of Thrones, and others) as well as a strong balance sheet and acquisition track record to augment organic growth with M&A in what is a highly fragmented market,” he wrote.Taking all of this into consideration, the four-star analyst puts the 2-year 2019-2021 revenue and EBITDA CAGR at 13% and 18%, respectively. Not to mention the company is also expected to surpass consensus estimates over the next few years.In line with his bullish thesis, Thornton started his ZNGA coverage with a Buy recommendation. In addition, he set a $7.50 price target, indicating that shares could surge 23% in the next twelve months. (To watch Thornton’s track record, click here)Looking at the consensus breakdown, 6 Buys, 1 Hold and 1 Sell published in the last three months add up to a Moderate Buy. With a $7.50 average price target, the upside potential matches Thornton’s forecast. (See Zynga stock analysis on TipRanks) FTI Consulting, Inc. (FCN)Operating as a global business advisory firm, FTI Consulting offers its clients transactional, operational, financial, legal and reputational services. In 2019, the company saw shares climb 66% higher, and one analyst is betting that this run can continue in 2020.SunTrust Robinson’s Tobey Sommer argues that for the first time in its history, FTI has created a sustainable organic growth firm that constantly adds new employees so that it can offer “adjacent services”. Among these new services are business transformation, public affairs, cyber and global construction disputes. “We believe that FCN should be able to hire a steady stream of experienced talent from Big 4 accounting firms in Europe who are worried that emerging regulatory scrutiny will conflict them out of work from key relationships,” he noted.Additionally, Sommer cites several key upcoming catalysts as putting FCN on an upward trajectory. He thinks that fourth quarter revenue and EBITDA should beat the Street’s estimates, with the midpoint for initial 2020 guidance falling in line with expectations.He added, “From the initial guidance, we expect material upside results throughout the year propelled by headcount growth (year-over-year consultant headcount rose 17% in 3Q19), pricing could increase above trend and regulatory investigations into global tech firms could drive antitrust work.”It’s no surprise, then, that the five-star analyst stayed with the bulls, leaving the Buy rating unchanged. If that wasn’t enough, he gave the price target a boost, increasing the figure from $130 to $155. This bolstered target conveys his confidence in FCN’s ability to jump 31% in the twelve months ahead. (To watch Sommer’s track record, click here)When it comes to other analyst activity, it has been relatively quiet on Wall Street. As Sommer is the only analyst that has reviewed FCN recently, the word on the Street is that the stock is a Moderate Buy. The average price target and upside potential are also the same as the SunTrust Robinson analyst’s. (See FTI Consulting stock analysis on TipRanks)
Las Vegas Sands' (LVS) fourth-quarter 2019 revenues are expected to have declined due to soft Sand Cotai Central. Yet, higher margins from mass and non-gaming segments are likely to have boosted its profits.
The video game industry is involved in the development, marketing and sale of hardware and software, fueled by advances in technology, high-speed connectivity, and customized gadgets. Some of the top companies in the industry today include Sony Corp.