Tag Archives: ZNGA

Zynga: A Safer Bet Now? [Seeking Alpha]

Zynga (ZNGA), as the world’s leading provider of social game services, continues to expand into the mobile end. By launching Running With Friends on May 9, 2013, Zynga further expands it mobile portfolio. Similar to the previous launch of Draw Something 2 in April, Running With Friends is available on iPhone, iPad, and iPod touch. These new titles should contribute to Zynga’s declining revenues in the coming quarters.

Draw Something 2 ranked No. 60 on the list of top grossing apps and No. 19 on top paid apps as of May 15, 2013. Draw Something 2 is estimated to generate $53,943 daily revenue, as seen from the data below.

(click to enlarge)

Source: Think Gaming

While this revenue estimate for Draw Something 2 may be limited by the publicly available data and Think Gaming’s proprietary models, it indicates a solid start for Draw Something 2. There are two major positive catalysts for Zynga, including the growth on the mobile end and expansion into real-money games, whereas Zynga just launched its first ever real-money games in the UK in April.

Zynga: Dumping Or Buying? A $1.7 Billion Dollar Question [Seeking Alpha]

Zynga (ZNGA) is a leading provider of social game services with 253M average monthly active users over 175 countries. With declining revenue and a disappointing forecast, it may still be too early to dump ZNGA.

The Good and Bad

For Q1, Zynga reported net income of $4.1M (break-even on a per share basis) compared with a net loss of $85.4M (loss of 12 cents per share) for the same period last year. Adjusted net income was $9.1M (1 cent per share) for Q1. However, revenues declined nearly 18% to $263.6M while bookings fell to $229.8M. Analysts were expecting revenue of $264.5M with a loss of 3 cents per share.

ZNGA generated $230M in bookings, exceeding the management’s expectations. FarmVille 2 outperformed with audience engagement and bookings hitting near peak levels in the quarter seven months after launch. The FarmVille 2 team was able to drive multiple days with growth bookings exceeding $1 million per day, including the amount retained by Facebook (FB). Web bookings were down 37% year-over-year and 15% quarter-over-quarter driven primarily by lower web user pay. On the other hand, mobile bookings were up 21% year-over-year, but down 8% quarter-over-quarter driven by a light slate of new game launches over the past two quarters that would normally offset aging live games.

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4 Social Network Stocks With Long-Term Uptrend [Seeking Alpha]

While Nasdaq has gained 8.23% year to date, leading social media companies, except Facebook Inc. (FB) with only 5.17% gain, were up much more significantly, including Pandora Media Inc. (P) with 42.28% increase, LinkedIn Corp. (LNKD) with 53.03% surge and Zynga Inc. (ZNGA) with 52.35% advance, as seen from the chart below.

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Source: Google Finance

Facebook Inc.

Facebook, with a market cap of $62.25B, is the world’s largest online social network with over 1.06 billion total users and around 618 million daily active users.

FB was upgraded by Argus from hold to buy with a price target of $36.00 on April 5, 2013. On the same day, Oracle Investment Research initiated coverage on FB with a strong buy rating and a price target of $38.00, and the analysts said,

We think the new ‘Facebook Home’ hit a home run with their new HTC rollout. Incorporating Facebook as the ‘front and center’ theme to drive user interface on mobile devices.

Analysts currently have a mean target price of $33.20 for FB, suggesting 21.21% upside potential based on the closing price of $27.39 on April 5, 2013.

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Zynga And LinkedIn: Turnaround Story Vs. Amazing Growth [Seeking Alpha]

Zynga Inc. (ZNGA) and LinkedIn Corp (LNKD) are two highly debated, watched Internet technology stocks with high trading volume, which had recently received updated calls from analysts. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

Zynga Inc.

ZNGA was up 2.06% and closed at $3.42 on March 22, 2013. ZNGA had been trading in the range of $2.09-$13.55 in the past 52 weeks. ZNGA has a market cap of $2.70B. With the recent pullback, ZNGA may present a short-term buying opportunity for investors with strong risk tolerance.

Recent Analysts Calls

On March 22, 2013, CLSA initiated a new coverage with an underperform rating and a target price of $3.50 on ZNGA. On March 20, 2013, BofA/Merrill Lynch downgraded ZNGA from buy to neutral based on its valuation, following a significant run in the stock. Analyst Justin Post said the stock already reflects potential value from its games and cautioned about risk from new competitive real-money poker launches. Post said,

The only driver of meaningful earnings surprise in 2013, in our view, is with a hit new social PC game, which is unlikely and difficult to predict.

Analysts Estimates

Analysts currently have a mean target price of $3.84, suggesting 12.28% upside potential. Analysts, on average, are estimating an EPS of -$0.04 with revenue of $222.46M for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of -$0.05 with revenue of $956.10M, which is 16.70% lower than 2012. For 2013, analysts are predicting an EPS of -$0.01 with revenue of $1.03B, which is 8.10% higher than 2013.

Why Zynga Is Not A Good Acquisition Target For Yahoo: 5 Fundamental Reasons [Seeking Alpha]

Zynga (ZNGA) is a leading provider of social game services with 240M average monthly active users over 175 countries. ZNGA was up 10.11% and closed at $3.93 on March 11, 2013. ZNGA had been trading in the range of $2.09-$14.48 in the past 52 weeks. ZNGA has a market cap of $3.08B. Since my last article of “Zynga: Ready For Real-Money Games And Improving On The Cost Side,” ZNGA had gained 38.38% with recent positive developments on online gambling and a buyout rumor.

On March 11, 2013, Wunderlich Securities analyst Blake Harper said that while last week’s speculation about Yahoo (YHOO) acquisitions focused on the reviews site Yelp Inc. (YELP) and reservations service OpenTable Inc. (OPEN), Zynga could make sense as a target, along with companies like the blogging service Tumblr and location app FourSquare. Harper further indicated that Yelp is the most attractive candidate as its market capitalization is half that of Zynga, where larger deals would be discouraged by Yahoo’s shareholders who want the company to focus on improving its core business.

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5 Outperforming Social Network Stocks: Rebounding And Flying High In 2013 [Seeking Alpha]

The Nasdaq has logged a solid gain of 5.76% YTD as of February 8, 2013; however, it is much less impressive compared to the following 5 social network companies: Facebook Inc. (FB), Groupon Inc. (GRPN), Yelp Inc. (YELP), LinkedIn Corporation (LNKD), and Zynga (ZNGA). Below is the chart showing YTD performance for 5 social network companies, as compared to the Nasdaq index.

Source: Google Finance

More Mobile

In 2012, Facebook stated

we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future and that the usage through personal computers may be flat or continue to decline in certain markets, including key developed markets such as the US, in part due to our focus on developing mobile products to encourage mobile usage of Facebook.

This means that the future of social media will shift toward the networks that make engagement on the go easy. Traditional media must provide better mobile experiences and ensure mobile interfaces are streamlined and fast-loading. More revenue models also need to be established on the mobile platforms.

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4 Gaming Stocks Gaining Strong Upside Momentum [Seeking Alpha]

News of a jump in Nevada gambling revenue and optimism about the possibility of legalized online gambling in New Jersey had boosted the share prices for casino companies on February 8, 2013. Some other gaming stocks are also benefiting from the increasing revenue in Macau. In this article, 4 gaming related stocks will be presented which are gaining positive momentum with unusual daily call options volume ratios. Unusual option activities can also be an indicator or precursor of a major movement for the underlying stock.

MGM Resorts International

MGM Resorts International (MGM) is a hospitality company, engaging in operation of casino resorts, which includes offering gaming, hotel, convention, dining, entertainment, retail and other resort amenities. MGM has two segments that are based on the regions, in which it operates: wholly owned domestic resorts and MGM China. MGM closed at $13.51 with 4.40% gain on February 8, 2013 and had a daily call volume ratio of 2.26. MGM had been trading in the range of $8.83-$14.94 in the past 52 weeks. MGM has a high beta of 3.68.

Fundamentally, MGM has an enterprise value of $17.59B with a market cap of $6.61B. MGM has a total cash of $2.56B with a total debt of $13.83B. MGM generates an operating cash flow of $1.08B with a levered free cash flow of $782.43M. MGM has an operating margin of 9.53% and a negative profit margin of -7.47%. MGM has a negative return on equity of -4.66%.

Technically, the MACD (12, 26, 9) is showing a slightly bearish trend, but the MACD Histogram is decreasing and could signal a bullish sign when turning positive. The momentum indicator, RSI (14), is indicating a strong buying momentum at 8.87. MGM is currently trading above its 50-day MA of $12.03 and 200-day MA of $10.97, as seen from the chart below.

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Time To Fold The Zynga Bet And Wait [Seeking Alpha]

Zynga Inc. (ZNGA) no longer has the preferential treatment on Facebook Inc. (FB), the world’s No. 1 online social network. “ZNGA and FB loosened terms of longstanding alliance, giving themselves greater leeway to pursue social gaming independently and heightening concern that the companies will one day be rivals,” as reported from Bloomberg. This surprising announcement immediately raised a few serious concerns for ZNGA investors as the share price dropped 12.60% after hours.

Potential Impact

The latest agreement is seen as a move by Facebook to level the playing field between Zynga and other game makers, which Facebook is trying to attract. On the positive side, Zynga will gain more flexibility to offer games on its own website and has the option not to use Facebook’s payments mechanism to collect revenue or display Facebook’s ads. In the long-term, these could give Zynga more freedom to build its platform with more controls. However, numerous challenges needed to be addressed in the short-term. Below is a list of risks and opportunities for this partnership change.

Read more HERE.