UPDATE: Bank of America Downgrades Zynga, Notes Risk & Lack of Visibility

In a report published Monday, Bank of America Merrill Lynch analyst Justin Post downgraded Zynga ZNGA from Neutral to Underperform. Post noted that additional risk to 2014 guidance, execution is more difficult for turnover and acquisition integration due to a lack of product plan and the hard to justify 21x EBITDA valuation. The analyst commented that management's 2014 bookings guidance of $710 million implies that the quarterly bookings run-rate will hit approximately $178 million, $31 million high than fourth quarter. Bank of America remarked that first quarter guidance calls for stand-alone bookings down. The analyst reported that there has been little visibility on Zynga's new content or titles. Post commented that the company's mobile track record is “spotty”. Bank of America wrote, “The 2014 outlook likely assumes the success of new titles in the back half, as well as stabilization of existing brands. We have modeled in Poker stabilization and growth in core-Zynga, but we lack product roadmap visibility to support a more optimistic view.” Shares of Zynga closed at $4.40 on Friday.