Out Fox The $treet

  Zynga agrees to be bought by Take-Two Interactive at a disappointing valuation despite the deal premium. The new entity proposes a company rivaling EA trading at a major discount to the gaming giant. The new Take-Two will have appealing 14% growth rates plus $500 million in net bookings synergies in mobile. The stock will trade at a FY23 EV/S multiple of 3.5x, which is a major discount to past multiples. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » For long-term shareholders, the  Take-Two Interactive Software  ( TTWO ) deal to acquire  Zynga  ( ZNGA ) for $10 per share is a disappointing valuation considering the stock regularly traded above $11 last year. For short-term traders, the 64% premium provides a good time to exit the stock after a rough last few months. My  investment thesis  remains Bullish on the stock after the massive hit to Take-Two Interactive takes Zyng...

  Zynga boosted Q4'21 bookings guidance setting Q3 as the trough from the reopening. The company has a solid new game launch sequence plus acquisitions to boost bookings going forward. The stock is far too cheap trading at just 10x logical '22 EBITDA targets. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » The market always has amazing dynamics causing investors to over extrapolate on short-term trends.  Zynga  ( ZNGA ) benefitted from the covid boost during 2020 and now the company is struggling to report growth due to the tough comps from last year. My  investment thesis  is very Bullish on the stock following the dip below $7 despite strong results. Read the full article on Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details.  Update - Jan. 10 Interesting deal, glad part of the deal is in cash. Similar to Glu Mobile not sure why Zynga ...

  Zynga barely beat Q2 analyst targets, but the company cut 2021 bookings guidance. The mobile game developer outlined several key reasons for pain during the current quarter. The stock is cheap at ~3x '22 bookings estimates, as Zynga will return to growth next year. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » Businesses that benefitted from COVID-19 lockdowns are starting to feel some ramifications from the reopening trade.  Zynga  ( ZNGA ) is a primary example of the stock plummeting on  Q3'21 audience softness  due in part to the tough comps in 2020. My  investment thesis  is very bullish on the mobile gaming stock, as any material sell-off provides a grand entry point to better growth in 2022. Read the full article at Seeking Alpha Disclosure: Long ZNGA. Please review the disclaimer page for more details.  Update - August 12 The irrational dip appears to be hitti...

Zynga reported a strong quarter and boosted '19 bookings by $46 million. The mobile game developer continues to boost revenues per share by acquiring gaming assets on the cheap with massive cash balances. The stock remains cheap at 3.1x EV/20 revenue estimates. Despite  Zynga  (NASDAQ: ZNGA ) thriving in the last few years, the stock valuation still trades below peer stocks. The recent  Q3 results  were another prime example of the market virtually ignoring the improvements ongoing at the mobile game developer. The stock remains a bargain at  3.1x EV/20 revenues  in an industry where larger, slower growing players trade at 5.0x valuation multiples. Read the full article on Seeking Alpha.  More timely commentary - WhoTrades Disclosure: Please review the disclaimer page for more details. 

As part of the announcement regarding the acquisition of Small Giant Games for $560 million, Zynga (ZNGA) increased bookings guidance for Q4. The mobile-game developer now expects to reach $260 million in bookings during the quarter prior to closing the deal.

Zynga has started generating consistently solid cash flows. The company maintains a large cash balance and other valuable assets. The stock valuation remains cheap with a large gap between a leader in the sector. For the longest time, business TV hosts have joked about a company being the next  Zynga  ( ZNGA ) in reference to a stock that was overhyped and should've never gone public. The joke is finally on the TV hosts that haven't kept up on the emerging story. As long as the market view doesn't adapt to the new realities of a nicely profitable company, value will exist in the stock. Read the full article on Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

The continual shift to mobile makes Zynga an attractive stock. The soft launch of a previous hit web game left for dead provides a catalyst for the stock. The strategy to recapture lost users of the decade could benefit operating metrics and boost the stock. The biggest issue with  Zynga  (NASDAQ: ZNGA ) over the last couple of years was the shift away from online platforms. All of the success on mobile was mostly hidden by the declines in revenues and users from games on  Facebook  (NASDAQ: FB ) and other web platforms. Read the full article on Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

The recent success of a mobile game ushers in a new era for Zynga. A big mobile hit will change the market perception of the game developer. The stock still offers a very compelling valuation despite trading at the 52-week high. The biggest rap of Zynga (NASDAQ: ZNGA ) since the peak of the Facebook (NASDAQ: FB ) gaming platform was the lack of a solid mobile lineup. The game developer hired Don Mattrick to usher in the shift to mobile, but the company struggled to make the shift fast enough. Read the full article at Seeking Alpha.  Disclosure: Long ZNGA

Zynga plunges prior to the release of Q4 earnings. The stock trades at valuations reminiscent of Glu Mobile prior to the recent post-earnings rally. At this valuation, Zynga doesn't need any catalysts for a rally; however, a couple of new games provide the opportunity for a big hit at last. The market is spooked by some of the large selloffs after stocks report weak Q4 numbers or provide tepid forward guidance. The key though is to understand where the stock comes from heading into the earnings release. Read the full article on Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

Zynga continues making progress in mobile due to the surprise success of two slots games. The stability of core franchises on the web will eventually help propel bookings higher. Zynga is an extreme value as the stock bounces off the recent lows. While a lot of media debated the quality of the Q2 earnings report of Zynga (NASDAQ: ZNGA ), the results were unquestionably stronger than presented. As investors absorbed the numbers, the stock eventually bounced off the lows of $2.45, near the all-time lows reached late last year. Read the full article at Seeking Alpha. Disclosure: Long ZNGA. Please review the disclaimer page for more details.

Mobile game developers are struggling now, but investors shouldn't overlook the valuation prospects when the stocks turn around. Electronic Arts and Activision Blizzard don't offer any growth, yet the market is rewarding these stocks higher valuations. Investors should review how the console game developers turned around weak prospects to huge stock gains before dismissing the stocks focused on mobile games. Everybody knows that videogame players are shifting to mobile, but ironically the console game developers continue to reign supreme. Typically, the small growth companies garner the highest valuation multiples, but that isn't the case in the videogame developer sector. Read the full article on Seeking Alpha. Disclosure: Long GLUU and ZNGA. Please review the disclaimer page for more details. 

Summary Zynga continues making progress towards shifting to a mobile game developer. The downshift in web game revenue is masking the progress made by the previous CEO. The company remains attractive at these valuations based on strong financial assets and game franchises. With all of the assets of Zynga (NASDAQ: ZNGA ), the biggest fear is a lack of focus at the game developer that slowly burns the cash balance. The company has spent the last few years building up new game categories and switching CEOs to only end up back in the same place. Read the full article on Seeking Alpha. Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

 Summary New Words With Friends mobile game appears a hit in the making. Zynga is slowly increasing success on mobile games. The stock crashed close to the all-time lows providing for the ultimate long-term entry point due to limited downside risk.  Oddly, Zynga (NASDAQ: ZNGA ) is plunging toward all-time lows, but the company is starting to make some progress in mobile. The lack of success with transitioning from the Facebook (NASDAQ: FB ) platform to mobile apps is the prime reason the stock is down at these lows.  Read full article  at Seeking Alpha.  Disclosure: Long ZNGA. Please review the disclaimer page for more details.

Summary New mobile game releases continue to struggle. Assets including cash prevent significant downside risks. Results from other mobile games continue to suggest that brands and franchises have an inside tract to success.  While smaller mobile game rival Glu Mobile (NASDAQ: GLUU ) continues producing daily download stars, Zynga (NASDAQ: ZNGA ) can't seem to catch a break. The company recently released a game into a new genre and updated a long-term winner with limited success on the daily charts.   Read the full article at Seeking Alpha.   Disclosure: Long ZNGA, GLUU. Please review the disclaimer page for more details.

Following an investor presentation -- on the back of news of more executive departures -- Zynga ( NASDAQ: ZNGA     ) shares plunged to lows not seen in nearly a year. While investors shouldn't attempt to time the market, they should take advantage of large moves in either direction to modify positions. As long as an investing thesis hasn't changed, investors can use their acquired knowledge of the company to take advantage of a large, outsized market move that happens too often these days. Anybody following Zynga over the last year knows that the company is in the midst of finishing up a turnaround led by CEO Don Mattrick. The company has shown a promising reversal in user trends and monetization metrics and is now embarking on a path toward growth. In the midst of all these improvements, investors became overly cautious on the mobile and social gaming sector following the disappointing IPO of King Digital Entertainment ( NYSE: KING     ) . Rea...

The biggest complaint with the recent IPO of King Digital Entertainment ( NYSE: KING     ) was the inability to predict future revenue streams. In the case of King Digital, the big hit game of Candy Crush Saga fundamentally distorted future results. If the company and industry can't guarantee repeated success, then the market will have a difficult time providing high valuations to the mobile and social game developers. In the case of Zynga ( NASDAQ: ZNGA     ) , new CEO Don Mattrick made the concept of sustainable franchises a cornerstone of his arrival at the large game developer. It mirrors his past experience at Electronic Arts ( NASDAQ: EA     ) , where the focus was on repeatable game franchises that brought in consistent revenue streams in the way of large console hits. The ability to predict mobile and social success is very difficult with the diluted playing field and relatively easy entry. Read the full article here . ...

The market doesn't seem to like it, but the first-quarter earnings results from Zynga ( NASDAQ: ZNGA     ) provided solid indications that the company's turnaround is for real. After a little over two years of large declines in most metrics, the social game developer is finally showing some signs of live. The company hired Don Mattrick away from Microsoft to be the CEO nearly 10 months ago. With this release, former CEO Mark Pincus is now stepping away from his position leading the product development group to only focus on the Chairman position. This is another sign that Pincus is letting go of the past and allowing the highly respected Mattrick to run the company. Read the full article here . Disclosure: Long ZNGA. Please review the disclaimer page for more details. 

Recent large gains by Zynga, ( NASDAQ: ZNGA     )  highlight the benefits of long-term investing around a concept or management team. The struggling social game maker was languishing, until it hired a new CEO with extensive industry experience. Ironically, a month after the hiring of Don Mattrick you could've bought the stock for around $2.75, or roughly the same price the stock traded prior to the announcement. Mattrick experience includes building up Electronic Arts ( NASDAQ: EA     ) and he was considered the architect of the Xbox at Microsoft . Following solid quarterly numbers, the stock plunged on angst that Mattrick wasn't making any progress. Outside of a proclamation that the company would double down its focus on social games, the new management team left analysts with limited details on new game development. It also had some wondering how it would allocate its $1.5 billion cash balance. Read the full article here . Disclosure: ...

The recent downgrade by Sterne Agee on Zynga ( NASDAQ: ZNGA     ) apparently shook out many investors, considering that the company's stock plunged roughly 12% that day. The interesting news about the analyst report is that it provided virtually nothing in the way of news to investors who were paying attention. Zynga continues to be a leading social gaming platform that is struggling to complete a turnaround under new CEO Don Mattrick. While Mattrick came to Zynga from Microsoft ( NASDAQ: MSFT     ) with a ton of promise, he has yet to place his stamp on the company. Zynga has coffers stuffed with $1.5 billion in cash and a strong lineup of game franchises, yet it hasn't done much to innovate in the last year. The company has recently made some moves, including agreeing to accept Bitcoins and releasing an interesting slots game, but investors expect much bigger things out of a heavy hitter like Mattrick. Read the full article here . Disclosu...

After replacing the founding CEO in July with a star executive, Don Mattrick, from Microsoft , the best way to describe the year for Zynga ( NASDAQ: ZNGA     ) has been one of little-to-nothing in the way of external progress. The maker of social games for Facebook   ( NASDAQ: FB     ) and  mobile devices was able to stop the slide in quarterly revenue and, hence, share price, but Zynga has provided very little in the way of progress to external investors. At this point, investors must stick with new management and the hoped turnaround, or take the recent stock gains and run. Remember, Glu Mobile ( NASDAQ: GLUU     ) took roughly a year to complete its turnaround. Glu Mobile now sits with a strong game release lineup and a new platform for monetizing those games with tournaments and rewards. In a more interesting move, Glu Mobile even ported the popular Deer Hunter 2014 game from mobile to Facebook, providing solid evidence...