Zynga (ZNGA) closed at $5.72 in the latest trading session, marking a -0.35% move from the prior day. This move lagged the S&P 500's daily gain of 0.03%. At the same time, the Dow added 0.28%, and the tech-heavy Nasdaq lost 0.04%.
Coming into today, shares of the maker of "FarmVille" and other online games had lost 3.53% in the past month. In that same time, the Consumer Discretionary sector gained 3.04%, while the S&P 500 gained 2.25%.
Wall Street will be looking for positivity from ZNGA as it approaches its next earnings report date. On that day, ZNGA is projected to report earnings of $0.08 per share, which would represent year-over-year growth of 166.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $385.15 million, up 54.75% from the year-ago period.
ZNGA's full-year Zacks Consensus Estimates are calling for earnings of $0.23 per share and revenue of $1.51 billion. These results would represent year-over-year changes of +187.5% and +55.86%, respectively.
Any recent changes to analyst estimates for ZNGA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZNGA is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that ZNGA has a Forward P/E ratio of 24.6 right now. Its industry sports an average Forward P/E of 20.68, so we one might conclude that ZNGA is trading at a premium comparatively.
Also, we should mention that ZNGA has a PEG ratio of 1.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ZNGA's industry had an average PEG ratio of 1.45 as of yesterday's close.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 185, which puts it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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