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Zynga (ZNGA) Stock Sinks As Market Gains: What You Should Know

This story originally appeared on Zacks

Zynga (ZNGA) closed at $8.05 in the latest trading session, marking a -1.71% move from the prior day. This change lagged the S&P 500’s 0.85% gain on the day.

Heading into today, shares of the maker of “FarmVille” and other online games had lost 0.24% over the past month, lagging the Consumer Discretionary sector’s loss of 0.23% and outpacing the S&P 500’s loss of 0.37% in that time.

Wall Street will be looking for positivity from ZNGA as it approaches its next earnings report date. On that day, ZNGA is projected to report earnings of $0.06 per share, which would represent year-over-year growth of 300%. Meanwhile, our latest consensus estimate is calling for revenue of $659.23 million, up 4.98% from the prior-year quarter.

ZNGA’s full-year Zacks Consensus Estimates are calling for earnings of $0.35 per share and revenue of $2.81 billion. These results would represent year-over-year changes of +400% and +23.91%, respectively.

Investors might also notice recent changes to analyst estimates for ZNGA. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.78% lower. ZNGA currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, ZNGA is currently trading at a Forward P/E ratio of 23.21. Its industry sports an average Forward P/E of 23.03, so we one might conclude that ZNGA is trading at a premium comparatively.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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