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Zynga (ZNGA) to Report Q1 Earnings: What's in the Cards?
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Zynga is set to report first-quarter 2020 results on May 6.
The company expects first-quarter revenues to be $385 million, up 7.2% year over year.
The Zacks Consensus Estimate for revenues is pegged at $403.3 million, indicating an increase of 12.1% from the year-ago reported figure.
Moreover, the consensus mark for earnings has remained steady at 5 cents per share over the past 30 days, against loss of 12 cents per share reported in the year-ago quarter.
Notably, the company’s earnings missed the Zacks Consensus Estimate in the trailing four quarters, the average negative surprise being 163.3%.
Let’s see how things have shaped up for the upcoming announcement.
Factors Likely to Influence Q1 Results
Zynga’s mobile live services supported by strong popularity of five franchises — CSR Racing, Words With Friends, Zynga Poker, Empires & Puzzles and Merge Dragons! — are expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, coronavirus-led lockdown is expected to have been a major growth driver in increasing the number of active users in the to-be-reported quarter.
Management expects the top line to benefit from mobile live services with expected sequential growth across its five forever franchises.
Additionally, increasing popularity of games like Words With Friends and CSR2 is expected to have benefited Zynga’s net bookings in the to-be-reported quarter.
Notably, Zynga expects net bookings to be $400 million, up 11.1% year over year from first-quarter 2019 reported figure.
The Zacks Consensus Estimate for bookings is pegged at $406 million, indicating growth of 12.8% from the figure reported in the year-ago quarter.
In the first quarter, Zynga released Elite Customs feature in its mobile drag racing game, CSR2. Elite Customs gives players access to exclusive custom paints, liveries and interior options, license plate mods and wheel upgrades.
Additionally, the soft launch of the magical match-3 mobile game, Harry Potter: Puzzles & Spells in select markets, in the soon to-be reported quarter, officially licensed from Warner Bros. Interactive Entertainment is expected to have boosted active player accounts.
Moreover, tremendous initial response to self-publishing of Empires & Puzzles in Asian countries such as South Korea, Japan and Taiwan in the fourth quarter, is likely to have driven user engagement levels especially due to lockdown and confinement
Further, Zynga’s strength in Social Slots portfolio due to games such as Wizard of Oz Slots, Hit It Rich! Slots and Game of Thrones Social Slots Casino is expected to have positively impacted the top line.
However, declines in older mobile and web game users and Zynga Poker users are expected to have been a dampener.
For the to-be-reported quarter, the consensus mark for daily average users (DAU) and monthly average users (MAU) is pegged at 20.08 million and 66 million, respectively, indicating a decrease of 8.7% and 8.3% from the year-ago reported figure.
Moreover, sequential increase in operating expenses, as guided by the management, is expected to have kept margins under pressure.
Further, intensifying competition in the video game space from the likes of Electronic Arts, Take-Two Interactive, and Zynga is likely to have made a negative impact on first-quarter revenues.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Zynga has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Shopify (SHOP - Free Report) has an Earnings ESP of +23.41% and is #2 Ranked.
Etsy (ETSY - Free Report) has an Earnings ESP of +18.31% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Zynga (ZNGA) to Report Q1 Earnings: What's in the Cards?
Zynga is set to report first-quarter 2020 results on May 6.
The company expects first-quarter revenues to be $385 million, up 7.2% year over year.
The Zacks Consensus Estimate for revenues is pegged at $403.3 million, indicating an increase of 12.1% from the year-ago reported figure.
Moreover, the consensus mark for earnings has remained steady at 5 cents per share over the past 30 days, against loss of 12 cents per share reported in the year-ago quarter.
Notably, the company’s earnings missed the Zacks Consensus Estimate in the trailing four quarters, the average negative surprise being 163.3%.
Let’s see how things have shaped up for the upcoming announcement.
Factors Likely to Influence Q1 Results
Zynga’s mobile live services supported by strong popularity of five franchises — CSR Racing, Words With Friends, Zynga Poker, Empires & Puzzles and Merge Dragons! — are expected to have contributed to top-line growth in the soon-to-be-reported quarter.
Moreover, coronavirus-led lockdown is expected to have been a major growth driver in increasing the number of active users in the to-be-reported quarter.
Zynga Inc. Price and EPS Surprise
Zynga Inc. price-eps-surprise | Zynga Inc. Quote
Management expects the top line to benefit from mobile live services with expected sequential growth across its five forever franchises.
Additionally, increasing popularity of games like Words With Friends and CSR2 is expected to have benefited Zynga’s net bookings in the to-be-reported quarter.
Notably, Zynga expects net bookings to be $400 million, up 11.1% year over year from first-quarter 2019 reported figure.
The Zacks Consensus Estimate for bookings is pegged at $406 million, indicating growth of 12.8% from the figure reported in the year-ago quarter.
In the first quarter, Zynga released Elite Customs feature in its mobile drag racing game, CSR2. Elite Customs gives players access to exclusive custom paints, liveries and interior options, license plate mods and wheel upgrades.
Additionally, the soft launch of the magical match-3 mobile game, Harry Potter: Puzzles & Spells in select markets, in the soon to-be reported quarter, officially licensed from Warner Bros. Interactive Entertainment is expected to have boosted active player accounts.
Moreover, tremendous initial response to self-publishing of Empires & Puzzles in Asian countries such as South Korea, Japan and Taiwan in the fourth quarter, is likely to have driven user engagement levels especially due to lockdown and confinement
Further, Zynga’s strength in Social Slots portfolio due to games such as Wizard of Oz Slots, Hit It Rich! Slots and Game of Thrones Social Slots Casino is expected to have positively impacted the top line.
However, declines in older mobile and web game users and Zynga Poker users are expected to have been a dampener.
For the to-be-reported quarter, the consensus mark for daily average users (DAU) and monthly average users (MAU) is pegged at 20.08 million and 66 million, respectively, indicating a decrease of 8.7% and 8.3% from the year-ago reported figure.
Moreover, sequential increase in operating expenses, as guided by the management, is expected to have kept margins under pressure.
Further, intensifying competition in the video game space from the likes of Electronic Arts, Take-Two Interactive, and Zynga is likely to have made a negative impact on first-quarter revenues.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Zynga has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Wayfair (W - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify (SHOP - Free Report) has an Earnings ESP of +23.41% and is #2 Ranked.
Etsy (ETSY - Free Report) has an Earnings ESP of +18.31% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>