Candy Crush maker King Digital Entertainment PLC KING excited investors and analysts after reporting earnings on Thursday. Shares are trading more than 20 percent higher in the premarket.
The company reported earnings that beat expectations, while also offering good guidance and a special dividend of $0.94 per share. Wedbush said that these earnings show King is a “one-hit wonder no more.” Despite lowering FY15 estimates, the analysts raised the 12-month price target to $23 from $20 based on the fact that King is diversifying beyond just casual games.
Credit Suisse also raised its price target, setting it at $22 versus $20 previously. Analysts there were encouraged that the release of Candy Crush Soda increased engagement overall, instead of cannibalizing users from Candy Crush Saga. With this quarter’s earnings as a backdrop, the analysts said they expect a more gradual decay in older titles, which will help to support the stock moving forward.
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