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Zynga (ZNGA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·2-min read

In the latest trading session, Zynga (ZNGA) closed at $7.43, marking a +1.36% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day.

Heading into today, shares of the maker of "FarmVille" and other online games had lost 10.5% over the past month, lagging the Consumer Discretionary sector's loss of 5.34% and the S&P 500's loss of 2.37% in that time.

ZNGA will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2021. In that report, analysts expect ZNGA to post earnings of $0.06 per share. This would mark year-over-year growth of 300%. Our most recent consensus estimate is calling for quarterly revenue of $663.11 million, up 5.6% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.35 per share and revenue of $2.81 billion, which would represent changes of +400% and +23.85%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for ZNGA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. ZNGA is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, ZNGA currently has a Forward P/E ratio of 20.77. This represents a discount compared to its industry's average Forward P/E of 22.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 170, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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