Were King's Q2 Results A Repeat Of Zynga?

27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.

King Digital Entertainment PLC (NYSE: KING) is getting crushed like candy after reporting earnings this afternoon.The "Candy Crush Saga" producer reported a Q2 EPS of $0.38 versus the Street estimate of $0.43. Sales arrived at $490 million versus $490.03."Boy that's bad," Rob Enderle, principal analyst at Enderle Group, told Benzinga. "That means not only did they not set the market up for the results, but expenses drifted way off of revenues."Shares of King fell sharply in after hours trading, dropping by as much as 8.55 percent. The stock was down more than 8 percent as of 5:20 p.m. EST. This is actually a bit steeper than the

ENTER TO WIN $500 IN STOCK OR CRYPTO

Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!

2 percent decline Zynga Inc (NASDAQ: ZNGA) endured last week.Enderle said that CEOs don't get many moments like this, which could present a problem for King's chief executive, Riccardo Zacconi."The thing is, it shouldn't be a surprise," Enderle added. "The explanation should have been provided before the results so the market anticipated the costs. This looks like a flip in management and that's never good. There's really nothing good there. They're going to have to wade through that."

FREE REPORT: How To Learn Options Trading Fast

In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.

King Vs. Zynga

Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga that he favors King over Zynga."King is sort of a cash flow story," Udall explained. "They're not really growing but they're very profitable, which is very unusual. A brand-new IPO, typically a brand-new software IPO, is [typically] in a growth phase."Udall said that King generates "a lot of sales" and "a lot of bookings," allowing the firm to "generate a lot of cash flow" even if its EPS falls short of expectations."But they're not a growth story," he said. "So I guess the risk here is that they become like a Zynga."

'An Ugly Business'

Enderle said that this is "an ugly business to get into when most of what you're doing is copying someone else," referring to King and Zynga."If the market moves because you're one step back, you're probably not going to see it in time and get left behind," said Enderle. "It also means you spend most of your time figuring out who to copy, so you really don't have control of your destiny. It's more like you're managing on luck."Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.