Baird Likes Zynga's (ZNGA) OMGPOP Acquisition, Lifts Numbers
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Price: $8.18 --0%
Rating Summary:
15 Buy, 18 Hold, 1 Sell
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Today's Overall Ratings:
Up: 5 | Down: 4 | New: 11
Rating Summary:
15 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 5 | Down: 4 | New: 11
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Analysts at Baird are applauding Zynga's (NASDAQ: ZNGA) plans to acquire the developer of the hugely successful Draw Something app, OMGPOP, although they stopped short of upgraded the stock.
Baird's Colin Sebastian boosted his price target on ZNGA from $13 to $14, while reiterating their Neutral rating. He also raised Q1 and 2012 estimates. Q1 and Q2 net bookings estimates go to $320 million and $343 million, from $306 million and $323 million. "Given the positive trajectory of Draw Something, we believe there may be further upside to consensus estimates," the analyst said.
The reported purchase price of $200 million seems consistent with revenue multiples Zynga paid for other developers, Sebastian notes.
"We believe that OMGPOP will add an attractive user to Zynga and also be able to leverage Zynga's zCloud platform to improve monetization," he said. "Zynga will also increase its cross-promotional capabilities for new games as a result of expanding its game portfolio."
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 $13.72 yesterday.
Baird's Colin Sebastian boosted his price target on ZNGA from $13 to $14, while reiterating their Neutral rating. He also raised Q1 and 2012 estimates. Q1 and Q2 net bookings estimates go to $320 million and $343 million, from $306 million and $323 million. "Given the positive trajectory of Draw Something, we believe there may be further upside to consensus estimates," the analyst said.
The reported purchase price of $200 million seems consistent with revenue multiples Zynga paid for other developers, Sebastian notes.
"We believe that OMGPOP will add an attractive user to Zynga and also be able to leverage Zynga's zCloud platform to improve monetization," he said. "Zynga will also increase its cross-promotional capabilities for new games as a result of expanding its game portfolio."
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 $13.72 yesterday.
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