Zynga (ZNGA) closed at $8.38 in the latest trading session, marking a +0.96% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.84%. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 1.27%.
Heading into today, shares of the maker of "FarmVille" and other online games had lost 10.94% over the past month, lagging the Consumer Discretionary sector's gain of 2.98% and the S&P 500's gain of 0.6% in that time.
Investors will be hoping for strength from ZNGA as it approaches its next earnings release. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $627.09 million, up 58.83% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.35 per share and revenue of $2.22 billion. These totals would mark changes of +3400% and +41.98%, respectively, from last year.
Any recent changes to analyst estimates for ZNGA should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.93% higher. ZNGA is currently a Zacks Rank #3 (Hold).
Investors should also note ZNGA's current valuation metrics, including its Forward P/E ratio of 23.71. Its industry sports an average Forward P/E of 29.71, so we one might conclude that ZNGA is trading at a discount comparatively.
We can also see that ZNGA currently has a PEG ratio of 1.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Gaming industry currently had an average PEG ratio of 1.07 as of yesterday's close.
The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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