Description
Zynga reported outstanding quarterly results, including higher-than-expected Q3 revenue and bookings, as well as better-than-expected operating leverage. Their live services generated great results ahead of their guidance in Q3, including their highest-ever third-quarter revenue of $705 million, up 40% year over year, and record Q3 bookings of $668 million, up 6% year over year. The company’s strong performance happened to come against a difficult comparison from a year ago. It is worth mentioning that their top-line beat was driven by strong advertising results, particularly from Rollic’s hyper-casual portfolio. The management also went on to launch FarmVille 3 worldwide, a reimagination of one of Zynga’s most iconic franchises for the mobile platform. In Q3, the company increased its advertising revenue and reservations by 99% year over year. The company’s stock price has been negatively affected by the rising inflation and bond yields which led to a selloff and a contraction of valuation multiples. Even after the selloff, the company’s valuation remains steep and we give it a ‘Hold’ recommendation with a revised target price.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures
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