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Zynga, Inc. (ZNGA) is scheduled to report its Q2 2012 results on July 25, 2012, after the bell. The street expects EPS and revenue of $0.06 and $344.85M, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from ZNGA and the news from its closest competitors.

Zynga, Inc. Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last two quarters. In the last quarter it reported $0.06 EPS, just beating analyst estimates of $0.05.

Zynga, Inc. EPS Historical Results vs Estimates

The consensus EPS estimate is $0.06 based on 21 analysts' estimates. Revenue estimates are $344.85M. The median target price by analysts for the stock is $11.50.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On June 26, 2012, Stifel Nicolaus initiated Buy rating for the company.
  • On May 30, 2012, Robert W. Baird upgraded the company from Neutral to Outperform.
  • On April 18, 2012, Needham upgraded the company from Underperform to Hold.
  • On March 22, 2012, Needham initiated Underperform rating for the company.
  • On March 7, 2012, Canaccord Genuity initiated Hold rating for the company.
  • On February 14, 2012, Robert W. Baird downgraded the company from Outperform to Neutral.
  • On February 14, 2012, Barclays Capital downgraded the company from Overweight to Equal Weight.
  • On January 24, 2012, Barclays Capital initiated Overweight rating for the company.

Latest News

  • On June 26, 2012, Majesco Entertainment Co announced that it has entered into a publishing agreement with Zynga Inc. Under the agreement, Zynga will publish Mini Putt Park, Majesco's latest social game.
  • On June 20, 2012, Nokia Oyj announced new partnership with Zynga Inc to bring Zynga's games to Nokia Lumia smartphones and Windows Phones during autumn 2012, including Word with Friends and Draw Something.
  • On May 22, 2012, Reuters reported that Zynga Inc has reached a partnership agreement with American Express to issue a prepaid debit card that could be used to redeem virtual credits.
  • On May 8, 2012, Reuters reported that Zynga Inc, the publisher of games on Facebook like "FarmVille" and "CityVille," accused French game publisher Kobojo of trademark infringement, according to court documents.
  • On April 26, 2012, Zynga Inc updated fiscal 2012 outlook and expects adjusted EBITDA to be in the range of $400-$450 million and non-GAAP EPS to be in the range of $0.23 to $0.29. According to I/B/E/S Estimates, analysts are expecting the Company to report EBITDA of $383 million and EPS of $0.27 for fiscal 2012.
  • On April 3, 2012, Zynga Inc announced the completion of an underwritten public offering of an aggregate of 49,414,526 shares of its Class A common stock, including 6,445,373 shares of Class A common stock sold pursuant to the full exercise by the underwriters of their option to purchase additional shares.
  • On March 29, 2012, Zynga Inc announced the pricing of 42,969,153 shares of its Class A common stock at $12.00 per share in a secondary offering. All of the shares will be sold by existing stockholders.
  • On March 23, 2012, Reuters reported that Zynga Inc's shareholders will sell Class A shares worth about $591 million. Shareholders will sell a total of 43 million shares in the online game maker, including 16.5 million from Pincus, the Company said in a regulatory filing on March 23, 2012.
  • On March 21, 2012, Zynga Inc announced that it has acquired New York based social game developer OMGPOP, makers of the cultural hit mobile game, Draw Something, and over 35 additional social games.
  • On March 14, 2012, Zynga Inc announced that it has filed a registration statement with the U.S. Securities and Exchange Commission for certain stockholders of Zynga Inc. to offer shares of Class A common stock.
  • On February 14, 2012, Zynga Inc announced that for fiscal 2012, it expects adjusted EBITDA to be in the range of $390-$440 million and non-GAAP EPS to be in the range of $0.24 to $0.28. According to I/B/E/S Estimates, analysts are expecting the Company to report EBITDA of $322 million and EPS of $0.22 for fiscal 2012.
  • On February 13, 2012, Personalized Media Communications, LLC (PMC) announced that it has filed a patent suit in the United States District Court for the Eastern District of Texas against Zynga, Inc. (Zynga), for infringement of four of PMC`s patents.

Competitors

Electronic Arts (EA), Giant Interactive Group, Inc. (GA), Shanda Games (GAME), Changyou.com Limited (CYOU), and Sohu.com (SOHU) are considered competitors for Zynga and the table below provides the key metrics for these companies and the industry.

Zynga, Inc. key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one year period.

(click to enlarge)ZNGA Chart

ZNGA data by YCharts

Competitors' Latest Development

  • On June 11, 2012, Shanda Games Ltd announced that for the second quarter of 2012, it expects revenues to decline by 15% to 20% sequentially. The Company reported revenues of $220.7 million in the first quarter of 2012.
  • On April 30, 2012, SOHU.com announced that for the second quarter of 2012, it estimates total revenues to be between USD244-USD250 million, non-GAAP net income to be between USD34-USD37 million and non-GAAP fully diluted earnings per share (EPS) to be between USD0.40-USD0.45. According to I/B/E/S Estimates, analysts were expecting the Company to report revenue of $251 million, net income of $32 million and EPS of $0.81 for the second quarter of 2012.
  • On March 5, 2012, Giant Interactive Group Inc announced a cash dividend of $0.30 per ADS or ordinary share on its outstanding shares. The ordinary cash dividend is payable on April 9, 2012 to shareholders of record at the close of trading on March 23, 2012.
  • On February 22, 2012, Shanda Games Ltd announced that for the first quarter of 2012, it expects revenues to grow 2% to 4% sequentially. The Company reported revenue of $215 million in fourth quarter of 2011.
  • On February 6, 2012, SOHU.com announced that for the first quarter of 2012, it expects total revenues to be between USD219-USD225 million, non-GAAP net income to be between USD38-USD41 million. and non-GAAP fully diluted earnings per share to be between USD0.50-USD0.55. According to I/B/E/S Estimates, analysts were expecting the Company to report revenue of $238 million, net income of $45 million and EPS of $1.13 for the first quarter of 2012.

Technical Overview

The stock has a market capitalization of $3.54B and is currently trading at $4.80 with a 52 week range of $4.45 - $15.91. The stock's year-to-date performance has been -48.99%. It is currently trading below 20, 50 and 200 SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Source: Earnings Preview: Zynga