In the latest trading session, Zynga (ZNGA) closed at $9.55, marking a +0.32% move from the previous day. This change outpaced the S&P 500’s 0.62% loss on the day. At the same time, the Dow lost 0.69%, and the tech-heavy Nasdaq lost 0.94%.
Prior to today’s trading, shares of the maker of “FarmVille” and other online games had lost 0.94% over the past month. This has lagged the Consumer Discretionary sector’s gain of 3.32% and the S&P 500’s gain of 3.51% in that time.
Investors will be hoping for strength from ZNGA as it approaches its next earnings release, which is expected to be August 5, 2020. On that day, ZNGA is projected to report earnings of $0.06 per share, which would represent year-over-year growth of 250%. Meanwhile, our latest consensus estimate is calling for revenue of $502.94 million, up 33.63% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.29 per share and revenue of $1.85 billion, which would represent changes of +2800% and +18.51%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for ZNGA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ZNGA currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that ZNGA has a Forward P/E ratio of 33.02 right now. Its industry sports an average Forward P/E of 23.94, so we one might conclude that ZNGA is trading at a premium comparatively.
It is also worth noting that ZNGA currently has a PEG ratio of 2.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. ZNGA’s industry had an average PEG ratio of 1.9 as of yesterday’s close.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 185, which puts it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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