Earnings And Guidance
Zynga guided third-quarter bookings of $180 million–$190 million versus the Street's $188 million and non GAAP EPS of $0.01, which came in line with consensus.
"By year-end we believe user metrics (which have mostly stabilized) could begin to inflect upwards for the first time in years," analyst Brian Pitz wrote in a note.
"We note ZNGA does not need a breakout hit to drive growth and profitability and we continue to think the risk / reward looks attractive at these levels especially with $1.25 per share in cash, investments, and real estate," Pitz continued.
Game Catalysts
Among others, Pitz's bullish thesis is based on the solid performance of "CSR Racing 2" game, which reached No. 1 on Apple Inc. AAPL's U.S. App Store and has been consistently ranked as a top-20 "top grossing" app since launch.
"CSR 2's ads are not captured by the top grossing charts, which means CSR 2 is actually monetizing at higher levels than the App Store would indicate," Pitz highlighted.
During this holiday, Zynga will launch NaturalMotion's "console quality" "Dawn of Titans." Pitz also expects a Wizard of Oz themed match-three game, plus "FarmVille: Tropic Escape"also in the second half.
At time of writing, shares of Zynga were down 7.07 percent to $2.76, while the analyst has a price target of $5 on the stock.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.