Zynga dives; Sterne Agee thinks guidance will disappoint


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.

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Comments (5)
  • Stone Fox Capital
    , contributor
    Comments (9881) | Send Message
     
    Not sure it maintains that credibility if it only takes one view and sticks to it. The stock has spent the last year in an uptrend so being bearish was the wrong call for some time now.
    16 Jan 2014, 11:36 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (820) | Send Message
     
    Why do people buy this stock? At least buy a fad that's on the upswing, if you're going to buy a fad.
    16 Jan 2014, 11:50 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1579) | Send Message
     
    It's good for Sterne Agee to point out the obvious, but they are still showing too much optimism. There is no reason whatsoever to believe that next quarter will be the bottom.
    16 Jan 2014, 11:54 AM Reply Like
  • GaryO1
    , contributor
    Comments (31) | Send Message
     
    I like the management team. I think they are going to be able to get this company moving in the right direction.
    16 Jan 2014, 12:07 PM Reply Like
  • haleiwahu
    , contributor
    Comments (4007) | Send Message
     
    ZNGA has done nothing to increase their value since they were a $2.85 stock. So why did their value increase to $4.50?
    17 Jan 2014, 02:03 PM Reply Like
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