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Evercore Partners Lifts PT on Zynga (ZNGA), Keeps Underweight

February 6, 2013 8:59 AM EST Send to a Friend
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Price: $4.14 +0.73%

Rating Summary:
    3 Buy, 22 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 16 | Down: 8 | New: 22
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Evercore Partners raised its price target on Zynga (NASDAQ: ZNGA) from $1.70 to $2.70 but maintained its Underweight rating following Q4 results.

On the quarter analyst Ken Sena comments, "4Q12 result was better than expected as Zynga reported bookings, revenue, and profitability all ahead of our projections (despite weak guidance). Bookings of $261mm were 21% ahead of our $216mm estimate. Revenues of $312mm, thanks to a change in deferral accounting, were even better, beating our estimate by 44% to land flat with the prior year. Consequently, adj. EBITDA and EPS beat at $45mm and $0.01, compared to our -$10mm and -$0.04 forecast."

Looking ahead, bookings were weak, he noted: "Bookings guidance was worse as the company offered up $200-$210mm in 1Q13 bookings, roughly 20% below our estimate at the midpoint. Also, EBITDA guidance of zero to negative $10 million was $21 million below our $16 million estimate (now -$2mm). Also, for FY, Zynga provided no top-line guidance and offered EBITDA margins as a %age of bookings at 0-10% compared to our 12% est. (now 9%). "

Sena did note several positives, however: Stable cash balance, Greater cost controls, and Growing mobile monetization.

Bookings guidance was worse as the company offered up $200-$210mm in 1Q13 bookings, roughly 20% below the firm estimate at the midpoint. Also, EBITDA guidance of zero to negative $10 million was $21 million below their $16 million estimate (now -$2mm). Also, for FY, Zynga provided no top-line guidance and offered EBITDA margins as a %age of bookings at 0-10% compared to 12% est. (now 9%).
For an analyst ratings summary and ratings history on Zynga click here. For more ratings news on Zynga click here.

Shares of Zynga closed at $2.74 yesterday.




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Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

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