Needham & Company Upgrades Zynga (ZNGA) to Buy, Stock "Bottomed Out"
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Price: $8.18 --0%
Rating Summary:
15 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
Rating Summary:
15 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
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Needham & Company upgraded Zynga (NASDAQ: ZNGA) from Hold to Buy with a price target of $4.00.
Analyst Sean McGowan comments: "ZNGA reported slightly positive 3Q results after a negative preannouncement on October 4. 3Q revenues rose 3% YoY to $316.6mm, but fell 5% QoQ. Bookings fell 11% YoY and 15% QoQ to $255.6mm, slightly above our estimate of $254.2mm. Non-GAAP EPS were $0.00 and adjusted EBITDA was $16.2mm, above the top end of revised guidance ($10-15mm). Mobile games made up 20% of 3Q bookings compared to 6% in 3Q’11, and accounted for 22mm of the company’s 60mm DAUs. Zynga continues to expect FY bookings of $1.09-1.10B but raised the low end of adjusted EBITDA guidance to $152-162mm (previously $147-162mm). The company announced a partnership with bwin.party to develop “real money” casino games in the UK with management expecting a
1H ’13 launch. Zynga also announced the authorization of a $200mm stock buyback. While we expect challenges to continue, we believe the stock, with $2.05 per share in net cash, a buyback in place, and a major cost-cutting initiative and a gaming partnership both under way, has bottomed out."
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 $2.13 yesterday.
Analyst Sean McGowan comments: "ZNGA reported slightly positive 3Q results after a negative preannouncement on October 4. 3Q revenues rose 3% YoY to $316.6mm, but fell 5% QoQ. Bookings fell 11% YoY and 15% QoQ to $255.6mm, slightly above our estimate of $254.2mm. Non-GAAP EPS were $0.00 and adjusted EBITDA was $16.2mm, above the top end of revised guidance ($10-15mm). Mobile games made up 20% of 3Q bookings compared to 6% in 3Q’11, and accounted for 22mm of the company’s 60mm DAUs. Zynga continues to expect FY bookings of $1.09-1.10B but raised the low end of adjusted EBITDA guidance to $152-162mm (previously $147-162mm). The company announced a partnership with bwin.party to develop “real money” casino games in the UK with management expecting a
1H ’13 launch. Zynga also announced the authorization of a $200mm stock buyback. While we expect challenges to continue, we believe the stock, with $2.05 per share in net cash, a buyback in place, and a major cost-cutting initiative and a gaming partnership both under way, has bottomed out."
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 $2.13 yesterday.
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