Zynga dives; Sterne Agee thinks guidance will disappoint

|About: Zynga (ZNGA)|By:, SA News Editor

Sterne Agee (Neutral) has slashed its Zynga (ZNGA -8.2%) estimates ahead of the social gaming firm's Q4 report (due in the coming weeks), and declared Zynga's Q1 guidance is "likely to disappoint."

Sterne's Q4 bookings estimate has been cut to $130M from $137M - Zynga set a guidance range of $130M-$140M in October - and its Q1 bookings estimate all the way to $116M from $137M.

The firm now believes Q1, rather than Q4, will represent Zynga's bookings bottom; its estimates imply 50% Y/Y bookings drops for both quarters. Sterne's 2014 estimates are unchanged, but it think consensus forecasts for the year might be too high.

The fact Sterne has been either bearish or neutral on Zynga since its $10/share IPO likely gives its views added credibility in the eyes of some investors.