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Zynga (ZNGA) Dips More Than Broader Markets: What You Should Know

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Zynga closed at $6.09 in the latest trading session, marking a -0.49% move from the prior day. This move lagged the S&P 500's daily loss of 0.1%. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 0.47%.

Prior to today's trading, shares of the maker of "FarmVille" and other online games had lost 6.28% over the past month. This has lagged the Consumer Discretionary sector's loss of 0.86% and the S&P 500's gain of 3.67% in that time.

Zynga will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.08, up 100% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $721.09 million, up 3.17% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for Zynga. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Zynga is currently a Zacks Rank #3 (Hold).

Digging into valuation, Zynga currently has a Forward P/E ratio of 15.11. This valuation marks a discount compared to its industry's average Forward P/E of 16.7.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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