Zynga Inc. (NasdaqGS:ZNGA) is scheduled to report Q3 earnings results on November 4, 2020.
The company is expected to report earnings of $0.09/share on revenue of $453.6 million. The consensus earnings per share (EPS) of $0.09/share is based on a poll of 14 analysts and represents a growth in eps of 83.9% over the same quarter last year, when the company reported earnings of $0.05/share.
The revenue forecast of $453.6 million based on a poll of 12 analysts implies a year-over-year (YoY) growth in revenue of 31.4%. Last year the company reported $345.3 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $453.62 | $345.29 | 31.4% |
| EPS | $0.09 | $0.05 | 83.9% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 2 quarters.
What are your expectations from Zynga Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.07 | $0.10 | 50.9% | Beat |
| Q1, 2020 | $0.06 | $0.06 | 0% | Met |
| Q4, 2019 | $0.06 | $0.09 | 54.5% | Beat |
| Q3, 2019 | $0.05 | $0.05 | 0% | Met |
| Q2, 2019 | $0.05 | $0.06 | 24.8% | Beat |
| Q1, 2019 | $0.05 | $0.07 | 52.4% | Beat |
| Q4, 2018 | $0.04 | $0.05 | 24.1% | Beat |
| Q3, 2018 | $0.04 | $0.05 | 34.8% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −2.4%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 5, 2020 | $10.19 | $9.95 | −2.4% | Decline |
| May 6, 2020 | $7.62 | $7.64 | 0.3% | Increase |
| February 5, 2020 | $6.08 | $6.71 | 10.4% | Increase |
| October 30, 2019 | $6.07 | $6.17 | 1.6% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.54, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.54 implies a 0.5% chance of earnings manipulation.
Fundamentals And Technical Analysis
Zynga Inc. is currently trading at $9.36/share, down −1.0% for the day. The company is trading at approximately 87.4% of its 52-week high of $10.69/share. The company’s stock price is down −5.9% since the last earnings report and up 2.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 62.26 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of −362.60 and a forward P/E multiple of 27.91.
Zynga Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.77. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $9.36 |
| P/E Ratio | −362.6x |
| P/E Ratio (Fwd) | 27.9x |
| PEG Ratio | −4.4 |
| Total Debt / Total Capital | 6.6% |
| Levered Free Cash Flow | $247.5 million |
| EV / EBITDA | −1,665.0x |
Zynga Inc. is a large-cap stock with a market capitalization of $10.163 billion and a total enterprise value of $9.328 billion. The company operates in the Communication Services sector and the Entertainment industry.
Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company’s games are played on mobile platforms, such as Apple iOS and Google’s Android operating systems, as well as on social networking sites, such as Facebook and Snapchat. It also provides advertising services comprising mobile advertisements, engagement advertisements and offers, and branded virtual items and sponsorships to advertising networks, agencies, and brokers; and licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California.
