Analyst Says Zynga (ZNGA) Will Finally Hit Floor at $1.70
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Price: $8.18 --0%
Rating Summary:
15 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
15 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Yesterday Zynga (NASDAQ: ZNGA) announced preliminary third quarter results and a reduction to full-year guidance, prompting a sharp, 20 percent selloff in the stock. Considering the breadth of the decline, many are wondering where the bottom is. Analyst at Evercore Partners, who are underweight on the stock, see a base at $1.70.
"Zynga should trade in line with peers on the basis of bookings and adjusted EBITDA, or at 5x and 0.9x, respectively. However, we note that by properly accounting for its stock-based award activity, Zynga trades at closer to 40x our 2013 EBITDA estimates, so we do see some additional risk," said analyst Ken Sena.
"That being said, given the company's cash and tangible assets, we do see a decent stock floor. Our newly revised $1.70 target price assigns $0.36/share to the core business, $0.90/share for its cash (assumes 50% discount), $0.30/share for headquarter assets, and $0.17/share for the optionality the company holds within online gambling," added Sena.
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 $2.82 yesterday.
"Zynga should trade in line with peers on the basis of bookings and adjusted EBITDA, or at 5x and 0.9x, respectively. However, we note that by properly accounting for its stock-based award activity, Zynga trades at closer to 40x our 2013 EBITDA estimates, so we do see some additional risk," said analyst Ken Sena.
"That being said, given the company's cash and tangible assets, we do see a decent stock floor. Our newly revised $1.70 target price assigns $0.36/share to the core business, $0.90/share for its cash (assumes 50% discount), $0.30/share for headquarter assets, and $0.17/share for the optionality the company holds within online gambling," added Sena.
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 $2.82 yesterday.
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