Over the last trading session, shares of Zynga Inc. (ZNGA) was up slightly at $6.65 a share.
Year over year, the stock is now up 81% from a low of $3.68 in January 2019. That’s more than double the 30% gain on the Consumer Discretionary Selector SPDR Fund (XLY), and the S&P 500 gain of 33% year over year.
Zynga develops, markets, and operates social games as live services in the United States and internationally. The company’s games are played on mobile platforms, such as Apple iOS and Google’s Android operating systems, as well as on social networking sites, such as Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual items and sponsorships to advertising agencies and brokers; and licenses its own brands.
In recent days, the company beat earnings expectations with a loss of $3.5 million, or breakeven per share, as compared to $559,000, or breakeven year over year. Analysts were looking for a loss of three cents per share. Adjusted revenue came in at $433 million, as compared to analyst forecasts for $418 million.
“Our strong fourth-quarter performance capped off an outstanding year for Zynga,” CEO Frank Gibeau said, as quoted by The Street. “Live services are the foundation of our multiyear growth strategy and were the primary driver of our highest-ever annual revenue and bookings. Our momentum in 2019 has positioned us for continued growth in 2020,” he said. “We expect to increase our live services portfolio from five to six forever franchises and have the potential to launch new titles in the second half of this year.”
Wedbush analysts called it a “near perfect” fourth quarter for Zynga and reiterated his outperform rating on the stock, as noted by MarketWatch. Jefferies analysts also noted that “despite increased investor caution heading into the print, Zynga posted impressive 4Q results and a safe [fiscal-year] guide that should help pull the stock out of the penalty box.”
Better, ZNGA just forecast adjusted earnings of $350 million for 2020, as compared to expectations for $345.5 million. It’s also forecasting adjusted revenue of $1.75 billion for the year, as compared to expectations for $1.74 billion.
Following the release, Piper Sandler increased its price target to $8 from $7.25, as well.
Ian Cooper’s Personal Position in ZNGA: None
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