Seeking Alpha

Zynga (ZNGA)

  • Dec. 22, 2014, 1:07 PM
    • Zynga (ZNGA +3.7%) is up 17% since officially launching Looney Tunes Dash on Thursday morning.
    • The game has risen to #7 on App Annie's U.S. iPhone free download rankings (#2 among games), and is at #28 on its U.S. Google Play free download rankings. Its Google Play rating remains at 4.1/5 stars (60,993 reviews).
    • Previous: Looney Tunes Dash sees strong early reception
  • Dec. 19, 2014, 11:17 AM
  • Dec. 18, 2014, 5:06 PM
    • Looney Tunes Dash, the fruits of a multi-year partnership with Warner Bros. that was announced in August, has been launched by Zynga (NASDAQ:ZNGA) on the App Store and Google Play.
    • The infinite runner game lets users run as Bugs Bunny, Road Runner (naturally), and other well-known Looney Tunes characters. 16 languages and 90 levels are currently supported.
    • Zynga has also launched a beta test for Empires & Allies, a mobile military strategy game. The title, which is aimed at a different kind of gamer than the ones that make up much of Zynga's core casual gaming base, is expected to see a full launch in early 2015.
    • With its core franchises still under pressure from competition and declining PC/Facebook gaming activity - MAUs fell 16% Y/Y in Q3, in spite of a boost from the NautralMotion acquisition - Zynga has been prepping a flurry of mobile game launches. A Tiger Woods golf game is on tap, as are new NaturalMotion titles.
    • Mobile accounted for 55% of Zynga's Q3 bookings. New Words With Friends has seen a decent reception since launching in October. NFL Showdown hasn't fared as well since its September launch.
    | Comment!
  • Dec. 16, 2014, 3:59 PM
    • Internet stocks have posted substantial losses after a morning market rally proved short-lived. The Nasdaq is down 1.2%.
    • In addition to Google, which has made new 52-week lows, Facebook (FB -3%), Twitter (TWTR -4.7%), Amazon (AMZN -3.5%), and Netflix (NFLX -3.2%) are among the underperforming names. Other decliners: Z -5.5%. TRLA -5.4%. MELI -5.4%. ZNGA -4.9%. ZU -3.2%. ANGI -3.4%.
    • The selloff comes even though Goldman upgraded its rating for the sector to Attractive from Neutral today. The firm noted Internet stocks are collectively down 16% over the last 12 months (maybe 18%-19% after today), and that forward EV/EBITDA multiples have contracted significantly.
    • Internet/social media ETFs: FDN, PNQI, SOCL
  • Nov. 11, 2014, 9:17 AM
    | 1 Comment
  • Nov. 11, 2014, 8:02 AM
    • Arguing the company's mobile growth is now offsetting PC/Facebook gaming weakness, Jefferies' Brian Pitz has upgraded Zynga (NASDAQ:ZNGA) to Buy, and set a $4.50 target.
    • Pitz calls New Words With Friends (launched in October) a "legitimate hit" - App Annie ranks it #6 on its U.S. iPhone app download chart - and expects the game (monetized via ads) to "benefit from strong seasonal trends around holiday ad prices, and strong demand for video ads."
    • He also likes Zynga's 2015 mobile game pipeline, which includes Tiger Woods Golf and new titles from NaturalMotion.
    • Needham upgraded Zynga on Friday following its Q3 bookings beat. The company's mobile bookings (lifted by NaturalMotion) rose 111% Y/Y in Q3, and made up 55% of total bookings.
    | Comment!
  • Nov. 7, 2014, 12:52 PM
    • Though some of Zynga's (NASDAQ:ZNGA) Q3 metrics were lower than Needham expected, analyst Sean McGowan thinks the strength in Zynga's bookings per paying user (in spite of a delayed Zynga Poker refresh) is "encouraging enough to signal the turnaround will gain momentum."
    • McGowan has upgraded shares to Buy, and set a $3.25 target. He's only slightly increasing his 2014 and 2015 estimates, but thinks "2016 could be considerably better than our prior estimate."
    • Zynga's average bookings per daily active user (paying or otherwise) rose 8% Q/Q and 34% Y/Y in Q3 to $0.055. On the other hand, DAUs fell 9% Q/Q and 13% Y/Y to 26M, and MAUs 14% Q/Q and 16% Y/Y to 112M. Monthly unique payers fell 19% Q/Q and 19% Y/Y to 1.3M.
    • Taking stock of the numbers, Sterne Agee's Arvind Bhatia (Neutral) argues Zynga is still a "show-me" story, given game delays and "the resultant pressure on traffic, bookings and margins." But he thinks growth could resume in 2015 as new games launch, and notes the company's $1.1B cash balance offers downside protection.
    • While PC (Facebook) bookings came under pressure, Zynga's mobile bookings rose 10% Q/Q and 111% Y/Y in Q3, and made up 55% of total bookings; Y/Y mobile growth was boosted by the NaturalMotion deal. Zynga also states the FarmVille, Casino, and Words With Friends franchises collectively saw 30% Y/Y bookings growth.
    • Results/guidance, PR
  • Nov. 7, 2014, 9:14 AM
  • Nov. 6, 2014, 4:10 PM
    • Zynga (NASDAQ:ZNGA): Q3 EPS of -$0.01 in-line.
    • Bookings of $175.5M (+15% Y/Y) beats by $3.8M.
    • Expects Q4 bookings of $183M-$213M and EPS of -$0.01 to $0.01, in-line with a consensus of $200.2M and $0.00.
    • Shares +6.8% AH.
    • Press Release
  • Oct. 28, 2014, 7:09 PM
    • Facebook's (NASDAQ:FB) aggressive 2015 spending forecast isn't driven by any particular field, but by large investments in everything from the core service to ad tech to new products, CFO Dave Wehner insisted on the CC. He suggested much of the new spending will be on hiring. (live blogs: I, II)
    • Price per ad soared 274% Y/Y in Q3, thanks in part to an overhaul of Facebook's right-hand column PC ads (they typically carry lower prices). With total ad revenue up "only" 64%, ad impressions fell 56% (fewer ads are shown on mobile).
    • PC ad sales rose 11% Y/Y, but were flat Q/Q. Though payments/other revenue rose 13% Y/Y, payments volume from games fell 2% due to lower PC gaming activity (a negative for ZNGA, which is down 1% AH).
    • Sheryl Sandberg notes only 11% of ad budgets are for mobile, and predicts improving inaccurate measurement systems (previous) will boost ROI and spending. She reiterates Facebook will take it slow in ramping Instagram and video ads, and that Facebook is aiming for Instagram to eventually have 1B users of its own (up over 4x from current levels).
    • Mark Zuckerberg cautions Oculus is unlikely to see 50M-100M unit shipments in the next few years, but reiterates he wants Oculus' VR headsets to be a mass-market product long-term. He also states Facebook plans to make new investments in growing public content viewing/sharing, where its focus on privately connecting friends/family can make for a tricky balancing act.
    • Facebook discloses WhatsApp (just beginning to monetize) had 2013 revenue of just $10.2M, and a loss of $138M ($98.8M from stock compensation).
    • Other details: 1) Of the 33M MAUs added in Q3, only 6M came from North America and Europe. 2) ARPU rose to $2.40 from $2.24 in Q2 and $1.72 a year ago. North American ARPU ($7.39) remains an outlier. 3) 456M MAUs (34% of them) are mobile-only.
    • FB -9.4% AH. Prior earnings coverage.
    | 1 Comment
  • Oct. 15, 2014, 2:17 PM
    • The ten companies in the Russell 1000 in which hedge funds hold the biggest stakes are down an average of 16% since that index hit an all-time high on September 18, according to Bloomberg. This stands against a slide in the index of just 7%.
    • “The reactive selling is institutional,” says a portfolio manager. “Now redemptions are coming in, and that’s putting more pressure on the market. All these things are in the mix for perhaps exacerbating the move.”
    • The list: Burger King Worldwide (BKW -4.5%), CVR Energy (CVI -2.4%), Spectrum Brands Holdings (SPB -3.3%), Ally Financial (ALLY -2.6%), Zynga (ZNGA -1.3%), NorthStar Realty (NRF -1.9%), Seventy Seven Energy (SSE -6.6%), Platform Specialty Products (PAH -1.4%), and SunEdison (SUNE -0.6%).
  • Oct. 9, 2014, 1:48 PM
    • New Words with Friends, a refresh for the Scrabble-like game that was once expected in Q2, has finally launched on the App Store and Google Play. Zynga (NASDAQ:ZNGA) declares it to be "the most significant upgrade to Words With Friends since its launch in 2009."
    • New features include the ability to play without a direct opponent or Internet connection, a service (called Community Match) that helps players find more opponents, and a built-in dictionary and stat-tracking.
    • The launch is a big one for Zynga, given the original Words with Friends (available on Facebook and mobile) still sees 55M matches played at any given moment, and is played for 7.5B minutes each month. Zynga claims the new features led to a 20% increase in words played during testing.
    • The company disclosed in August it had delayed rolling out New Words With Friends and a Zynga Poker refresh to improve the user experience. Its monthly active users were down 30% Y/Y in Q2 to 130M, in spite of the NaturalMotion acquisition.
    • Shares are selling off on a day the Nasdaq is down 1.4%.
  • Sep. 23, 2014, 5:35 PM
    | Comment!
  • Aug. 8, 2014, 10:26 AM
    • While several firms have cut their Zynga (ZNGA -5.7%) targets following yesterday's bookings miss and full-year guidance cut, no downgrades have arrived yet.
    • "We believe that industry growth should allow Zynga to grow revenues by $15 million per quarter sequentially for the foreseeable future," says Wedbush's Michael Pachter (Outperform). He's also pleased monthly unique payers grew by 300K Q/Q to 1.7M, and that other metrics also rose Q/Q (the NaturalMotion deal helped).
    • Credit Suisse's Stephen Ju is reiterating an Underperform, but his lowered $3.50 target remains above Zynga's current trading price. He notes Zynga now appears on pace to launch ~10 games annually (5 are expected in 2H14), something that could yield upward estimate revisions.
    • On the CC (transcript), CEO Don Mattrick stated Zynga chose to "hold back" the launch of new Zynga Poker and Words With Friends releases in Q2 after identifying areas for improvement. In addition, expected revenue recognition for certain NaturalMotion releases has been pushed out to 2015.
    • BTIG's Richard Greenfield questioned whether Zynga needs 2K employees (rather than 500-600), given it's now licensing IP from the likes of Warner Bros. and the NFL to create new games. Mattrick: "We want to build a big, successful app scale company with multiple experiences able to service multiple network partners."
    • Telsey's James Cakmak asked why Zynga isn't using its $1.1B cash balance to buy back shares. CFO David Lee: "We will continuously evaluate the ways to produce superior shareholder returns inclusive of all levers."
    • Prior Zynga earnings coverage
  • Aug. 8, 2014, 9:11 AM
  • Aug. 7, 2014, 5:36 PM
    | 1 Comment
ZNGA vs. ETF Alternatives
Company Description
Zynga Inc Zynga Inc provides social game services. The Company develops, markets and operates social games as live services played over the Internet, social networking sites and mobile platforms.