After a management shuffle that followed the company's sub-par financial performance and a decline in its market cap, it appears that Zynga ( ZNGA ) has started to turn things around. This year has been encouraging from a financial performance perspective, and we expect the growth revival to continue. What's really important for company is how it manages its costs, as even a slight improvement in margins can lead to significant upside for its EPS. Take a look at our interactive breakdown of AMD's business which shows how AMD can add 25% to its value by expanding in the server market.
Our price estimate for Zynga stands at $3.70 , implying a slight discount to the market price.
Zynga's Net Income & EPS Can Increase 30% By 2019, Driven By Mildly Higher Revenue And Meaningful Margin Improvement
Mildly Higher Revenue: Zynga's Revenue Will Increase Just 3% To 4%
Existing franchises including Zynga Poker, Farmville and Wizard of Oz Slots are doing well, and Zynga plans to focus on enhancing its successful franchises. In addition, Zynga's mobile business is showing a promising trend. In Q3'17, mobile revenue and bookings were up 44% and 20%, respectively, and mobile represented 87% of total revenue/booking.
Margin Improvement: Zynga's Adjusted EBITDA Margin Will Improve From 9.6% to 13.3%
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
