Zynga's CEO is "Taking Charge", Morgan Stanley Reports Optimism on Turnaround

In a report published Friday, Morgan Stanley analyst Scott Devitt reiterated an Underweight rating on

, noting optimism on a business turnaround following fourth quarter results. Zynga reported fourth quarter bookings at $147 million ahead of the Street's $141 million. EBITDA and non-GAAP EPS came in at $3 million and -$0.03, respectively. Both figures also came in ahead of the Street's estimates of -$17 million and -$0.04. The company announced full-year 2014 estimated guidance for organic bookings at $690-730 million and organic adjusted EBITDA guidance of $50-75 million. Morgan Stanley is more optimistic on a business turnaround following solid fourth quarter results and guidance, in addition to CEO Don Matrick's plans. Devitt commented on “3 ways the new CEO is taking charge: 1) Don Mattrick made a bold move in acquiring NaturalMotion for $527MM in cash ($391MM) and stock (40MM shares), to inject innovation back into Zynga. NaturalMotion is the creator of innovative 3D games like CSR Racing and Clumsy Ninja (which have both been showcased by Apple) and it also licenses technology to 3P publishers. 2) Zynga reinstated full-year guidance for 2014E, which implies Q/Q bookings growth each successive quarter and 7% upside to Consensus estimates at the midpoint. 3) Zynga plans to cut 15% of its workforce (300+ FTEs), which should save ~$35MM in cash expenses in 2014E.” Shares of Zynga closed at $3.56 on Thursday and are currently trading up 18.68% at $4.225.