Zynga: There's Still A Compelling Short Case Here
Vince Martin • 27 Comments
Vince Martin • 27 Comments
Zynga Is Still A Dog
Vince Martin • 24 Comments
Vince Martin • 24 Comments
Jan. 16, 2014, 11:33 AM
- 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.
Jan. 8, 2014, 7:03 PM
- Though it fell just short of its all-time high of $58.58, Facebook (FB +0.5%) delivered a record close today with the help of a bullish note from Deutsche's Ross Sandler.
- Sandler, who sang Google's praises yesterday, says he wouldn't be surprised if Facebook's ad revenue growth (+66% Y/Y in Q3) re-accelerated in Q4 thanks to improving monetization and still-rising engagement.
- Android app monitoring tool developer Little Eye Labs has confirmed its expected acquisition by Facebook. A source tells TechCrunch the startup, which bolsters Facebook's efforts to become the top platform for consumer mobile/Web app development, was acquired for $10M-$15M.
- During a recent interview, Facebook (FB) game partnership director Sean Ryan asserts Facebook is still seeing growing PC gaming activity, in spite of the mobile shift. That's a positive for Zynga (ZNGA), provided the company can stabilize its share. Ryan also claims the development of cross-platform games (e.g. Zynga Poker, Candy Crush Saga) yields higher engagement on both mobile and PCs.
- PC gaming still remains easier for Facebook to monetize, since the company (rather than Apple or Google) gets a 30% cut on in-app purchases. On mobile, Facebook is focused on monetizing gaming via its app install ads.
Dec. 10, 2013, 2:00 PM
- Candy Crush Saga developer King/Midasplayer is reportedly pushing back its anticipated IPO due to fears of being viewed as a one-trick pony if it goes public too soon. The British social/mobile game developer is said to be interested in further growing its portfolio before doing an offering.
- King is believed to have confidentially filed for an IPO in September, and is reportedly eying a $5B+ valuation. The company hasn't yet filed a public prospectus.
- AppData's figures suggest King has already made some progress in diversifying. The company has six different games within AppData's list of the top 100 Facebook apps in terms of MAUs, including the top three (Candy Crush, Pet Rescue Saga, and Farm Heroes Saga).
- Zynga (ZNGA +0.6%), by comparison, has five top-100 games, but none in the top-10. FarmVille 2 (#13) remains its most popular title, and is followed by Texas HoldEm Poker (#15) and Words With Friends (#18).
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Nov. 7, 2013, 11:48 AM
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Oct. 28, 2013, 12:15 PM
- Though the Nasdaq is only down 0.1%, many 2013 Internet, solar, and enterprise software high-flyers are diving once more. Chinese names are well-represented in the group, as NQ Mobile continues crashing thanks to fraud allegations and Sohu plunges due to weak Q4 EPS guidance.
- The WSJ and NYT have each run pieces asking whether a new tech bubble is afoot, at least in certain hot sectors. "People are reaching for growth," says one fund manager quoted by the WSJ. Others argue the fact the high-flyers generally have substantial revenue, and are often profitable, makes the current situation different from the Dot.com bubble.
- Internet decliners: FB -3.4%. MELI -2.8%. GRPN -5%. ZNGA -2.7%. P -2.4%. DANG -7.6%. VIPS -7%. YY -4.8%. QIHU -5.6%. RENN -5.7%. SINA -2.4%. FUEL -4%.
- Solar decliners: JKS -12.4%. FSLR -4.8%. SOL -8.4%. YGE -8%. JASO -6.9%. GTAT -5.4%. SUNE -4.6%. SPWR -4.3%. SCTY -3.8%. STP -8.9%. TSL -13.2%.
- Enterprise decliners: CRM -3.8%. DATA -4.5%. MKTO -5.8%. WDAY -4%. DWRE -3.4%. VEEV -5.1%. IMPV -3.4%.
- Recent declines: I, II.
- Previous: Cashin sees mobile/cloud bubble
Oct. 25, 2013, 9:22 AM
Oct. 24, 2013, 5:45 PM
Oct. 24, 2013, 5:13 PM
- Zynga's (ZNGA) daily active users fell 23% Q/Q and 49% Y/Y to 30M; Web DAUs fell by 7M Q/Q to 16M, and mobile MAUs by 2M to 14M. Monthly active users -29% Q/Q and -57% Y/Y to 133M. Web MAUs amounted to 82M, and mobile MAUs 51M.
- Monthly unique payers -17% Q/Q and -46% Y/Y to just 1.6M. However, average daily bookings per DAU rose 4% Q/Q and 17% Y/Y to $0.047.
- FarmVille 2, Zynga Poker, and FarmVille respectively made up 22%, 19%, and 18% of Q3 online game revenue vs. 15%, 20%, and 16% in Q2. Zynga claims it had 3 of the 10 most popular Facebook games in terms of DAUs as of Sep. 30.
- Thanks to job cuts, R&D spend -48% Y/Y to $81M. Likewise, sales/marketing spend -42% to $21.2M. G&A was relatively steady, falling only 4% to $34M.
- New COO Clive Downie comes over from leading Japanese mobile game platform provider DeNA, where he headed the company's American/European ops. He joins two months after Zynga's last COO, David Ko, left as part of a major restructuring carried out by new CEO Don Mattrick.
- ZNGA +10.9% AH. Q3 results, PR.
Oct. 24, 2013, 4:10 PM
- Zynga (ZNGA): Q3 EPS of -$0.02 beats by $0.02.
- Bookings of $152.1M (-40% Y/Y) beats by $8.4M.
- Expects Q4 bookings of $130M-$140M, below $147.9M consensus. Expects Q4 EPS of -$0.05 to -$0.04, below -$0.03 consensus.
- Mobile gaming industry vet Clive Downie has been named COO.
- Shares +11.3% AH. CC at 5:00PM ET. (PR)
Oct. 21, 2013, 4:35 PM| Oct. 21, 2013, 4:35 PM | 2 Comments
Oct. 18, 2013, 11:15 AM
- Thanks to Grand Theft Auto V's (TTWO -0.6%) blockbuster launch, U.S. retail physical video game sales rose 52% Y/Y in September to $754M, per NPD (or +40% if one includes PC game sales). Sales were up 21% in August after falling 19% in July.
- GTA V, whose global retail sales topped $1B within three days of its Sep. 17 launch, single-handedly accounted for over half of NPD's September figure. Electronic Arts' (EA +0.6%) Madden NFL 25 was #2 on NPD's bestseller list after coming in first in August, and FIFA 14 was #5. Take-Two's NBA 2K14 was #3, and Activision's (ATVI -1.1%) Diablo III was #4.
- Hardware sales -13% Y/Y to just $183M ahead of the Xbox One/PS4 launches. Accessories +2% to $142M. GameStop (GME +1.5%) is higher after initially trading near breakeven.
- NPD also reports U.S. digital game revenue rose 6% Y/Y to $970M, albeit with a mix shift away from traditional fare. Downloadable content sales for console-type games fell 23% to $198M, and subscription MMOs (such as Activision's World of Warcraft) lost 300K subs.
- However, mobile game sales rose 14% to $266M, social games rose 16% to $176M, and free-to-play MMOs such as EA's Star Wars: The Old Republic added 700K users. That first two figures spell bigger addressable markets for Zynga (ZNGA +1.8%) and Glu (GLUU +4.1%), respectively; each has lost some share this year.
Oct. 18, 2013, 10:29 AM
- "We believe that Google's (GOOG +12.8%) ability to monetize experiences through engagement-based services will allow it to disrupt many hardware and software layers over time," writes Evercore's Ken Sena, exemplifying the glowing analyst commentary that has followed Google's Q3 beat.
- Sena, who is raising his PT to $1,100, sees Google's services investments pressuring near-term margins, but also creating "a stronger platform ecosystem in which more collected data, better predictive analytics, and an increased amount of screen connectivity will lead to better overall search economics in addition to new opportunities."
- Needham and Jefferies have raised their PTs to $1,150, and Deutsche has raised its target to $1,220. YouTube's mobile growth, strong paid click volumes, and the potential for Enhanced Campaigns to lift search ad sales (after doing less damage than expected in Q3) are all mentioned as reasons to stay bullish.
- U.S. Internet peers continue to rally in sympathy: FB +4.1%. LNKD +3.7%. YELP +7.8%. AMZN +3.3%. Z +3.9%. TRLA +4.8%. ZNGA +2.8%.
- Foreign Internet names are also moving higher: BIDU +5%. YOKU +6.9%. SINA +3.7%. RENN +4.4%. QIHU +4.9%. DANG +5.9%. YNDX +4%. SIFY +3.4%.
- Google's Q3 results, details, CC remarks, transcript
Oct. 17, 2013, 7:05 AM
Oct. 14, 2013, 1:41 PM
- Though Zynga (ZNGA -1.4%) laid off nearly a fifth of its workforce earlier this year, Eric Jackson thinks the struggling social game developer needs even bigger cuts. Whereas Candy Crush Saga developer King (reportedly seeking a $5B IPO valuation) only has 600 employees, Zynga ($2.9B market cap, $1.4B enterprise value) still employs 2,300 people.
- Jackson is pessimistic about Zynga's near-term game pipeline - the company's quarterly DAU/MAU figures have been bleak, and the recent mobile launch of CastleVille has underwhelmed - but optimistic about new CEO Don Mattrick's ability to strengthen Zynga's game lineup in time. He also thinks (in spite of concerns to the contrary) Mark Pincus is giving Mattrick the freedom to reshape Zynga as he sees fit.
- Q3 results are due on Oct. 24.
Sep. 27, 2013, 5:37 PM
Zynga, Inc. operates as an online social game services company. It engages in the developing, marketing and operating of online social games as live services played over the Internet and on social networking sites and mobile platforms. The company provides its online social games under the Zynga... More
Industry: Internet Information Providers
Country: United States
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