Zynga Inc (NASDAQ:ZNGA) shares receives ‘Hold’ rating


Dallas, Texas 08/26/2013 (Financialstrend) – By the end of the last trading session, the stock of Zynga Inc (NASDAQ:ZNGA) had closed at the price of $ 2.81. By trading at this price, the stock of Zynga Inc had decreased by more than 30% from the highest price of $ 4.03 in the 52-week period. It was observed that the daily active users of Zynga during the second quarter of the year 2013 had declined to 39 million from 52 million active users observed during the first quarter of 2013. In contrast to this figure, the number of active users to Zynga was 72 million during the second quarter of the last year which had resulted in the decrease by 45% from year to year. There is no doubt from this, that the revenue generated by Zynga Inc would have been affected by this reduced number of users and the revenue for this quarter was reported as $ 231 million which is 31% down on year to year basis.

Although, Zynga Inc has been the leader in the segment, Benchmark Capital had started its coverage with ‘Hold’ rating pertaining to the active user base of Zynga and its discouraging results. Benchmark Capital had set a price objective of $ 2.98 over the shares of Zynga Inc. Per the views of Benchmark Capital, the near term risk-reward profile of the company’s stock price is balanced. Moreover, it has been mentioned in the report the strategic actions had to be taken by Zynga Inc for providing the satisfying web stabilization and mobile acceleration.

It could be noticed that, as part of the revival plans of Zynga Inc which was launched by new CEO, the company has reported the ‘stepping down’ of several key officials including COO, CTO, HR chief along with many other changes in executives. The new CEO is confident over the revival of Zynga Inc over the next 4 to 6 quarters given the resources and market opportunities.