Zynga Inc. (ZNGA): What Does Valuation Ratios Tell Us?

Zynga Inc. (NASDAQ:ZNGA) saw a downside of -0.80% to close Friday at $7.43 after subtracting -$0.06 on the day. The 5-day average trading volume is 15,097,800 shares of the company’s common stock. It has gained $7.61 in the past week. An average of 21,540,711 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 24,511,293.

ZNGA’s 1-month performance is -10.27% or -$1.10 on its low of $7.14 reached on 10/06/21. The company’s shares have touched a 52-week low of $7.14 and high of $12.32, with the stock’s rally to the 52-week high happening on 02/19/21. YTD, ZNGA has lost -24.72% or -$2.44. However, the current price is down -39.69%% from the 52-week high price.

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Insider Transactions

On Oct 01, 10 days have gone by since the last insider trading activity for Zynga Inc. (ZNGA). Ryan Jeffrey Miles (Chief People Officer) most recently sold 2,202 shares at $7.55 per share on Oct 01. This transaction cost the insider $16,625. Chief People Officer, Ryan Jeffrey Miles, sold 17,170 shares at a price of $7.89 on Sep 17. Then, on Sep 17, Chief Financial Officer Griffin James Gerard sold 15,943 shares at a price of $8.00 per share. This transaction amounted to $127,544.

Valuation Metrics

Zynga Inc. (ZNGA) has a trailing price-to-earnings (P/E) ratio of 30.66 for the sector. The company’s PE ratio for the last five years has touched a high of 276.93 and a low of 68.20. ZNGA stock has a beta of 0.10. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 3.25 while the price-to-book (PB) in the most recent quarter is 2.68, with the price to cash flow ratio at 26.82.

Zynga Inc.’s quick ratio for the period ended June 29 was 1.30, with the current ratio over the same period at 1.30 meaning that ZNGA stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.44, while the total debt to equity was 0.44. In terms of profitability, the gross margin trailing 12 months is 60.30%. The trailing 12-month EBITDA margin is 7.50% while for the period ending June 29; Zynga Inc.’s operating margin was -3.20%. The firm’s gross profit as reported stood at $1.16 billion against revenue of $1.97 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Zynga Inc.’s cash and short-term investments amounted to $444.5 million against total debt of $1.47 billion. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 37.27% to $720.0 million, while revenue of $680.3 million was 5.51% off the previous quarter. Analysts expected ZNGA to announce $0.09 per share in earnings in its latest quarter, but it posted $0.04, representing a -55.60% surprise. EBITDA for the quarter stood at more than $130.9 million. ZNGA stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 3.11 billion, with total debt at $1.47 billion. Shareholders hold equity totaling $1.09 billion

Technical Picture

Let’s look briefly at Zynga Inc. (ZNGA) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 08 October was 38.18% to suggest the stock is trending Neutral, with historical volatility in this time period at 25.62%.

The stock’s 5-day moving average is $7.34, reflecting a -0.80% or -$0.06 change from its current price. ZNGA is currently trading -15.57% above its 20-day SMA, -27.16% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by -27.23% and -25.63% respectively.

Stochastic %K and %D was 33.28% and 22.10% and the average true range (ATR) pointed at 0.23. The RSI (14) points at 35.63%, while the 14-day stochastic is at 40.85% with the period’s ATR at 0.24. The stock’s 9-day MACD Oscillator is pointing at -0.01 and -0.09 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Zynga Inc. (NASDAQ: ZNGA), UBS reiterated its a Buy rating for the company but lifted their price target by $14.50 to $13.50. Analysts offering their rating for ZNGA stock have a consensus rating for the stock as Buy. Currently, 1 brokerage advisors rate ZNGA as a “sell,”, while 0 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 2 rates the stock as overweight while 17 have offered a “buy” rating.

What is ZNGA’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $9.00 and a high of $15.70, with their median price target at $12.00. Looking at these predictions, the average price target given by analysts is for Zynga Inc. (ZNGA) stock is $12.03.


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