Zynga, Inc. (ZNGA - $2.63)* BUY San Francisco, CA Price Target : $3.50 January 12, 2017
Zynga, Inc. (ZNGA - $2.63)* BUY San Francisco, CA Price Target : $3.50 January 12, 2017 Stock Data Operating Data Closing Price On Report Date $2.63 Revenue in $000 2016 2017E 52-Week Range $1.78-$3.08 1Q $186,721A$ 189,226 ADTV (10day) 9,000,000 2Q $181,735A$ 189,445 Market Cap ($000) $2,320,733 3Q $182,424A$ 196,884 Earnings Data 4Q$ 185,898 $ 207,608 December FYE 2016* 2017E FY$ 736,778 $ 783,163 1Q$ (0.03) $ (0.01) EBITDA in $000 2Q$ (0.01) $ (0.01) 1Q $16,035A$ 27,010 3Q$ (0.05) $ (0.02) 2Q $18,647A$ 29,761 4Q$ (0.03) $ (0.02) 3Q $3,580A$ 20,607 FY$ (0.11) $ (0.06) 4Q$ 12,969 $ 28,979 *4Q16E FY$ 51,231 $ 106,357 The WORD is CASHFLOW We believe that the common stock of Zynga Inc. (ZNGA) is undervalued, perhaps materially, at current trading levels. The stock has performed poorly for the last several years, but we believe that a new CFO and the fact that the company has finally attained consistent positive free cash flow could be the catalysts that propel the stock forward. We believe the common stock is worth at least $3.50 per share, and could be valued significantly higher in an M&A transaction. • Compelling Opportunity in Mobile Gaming. The mobile gaming space is an infant industry, which has a bright long-term future. ZNGA is a veteran player in a rapidly evolving space. The company has established a solid portfolio of games with a broad mix that appeal to a wide variety of mobile gamers.
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