Zynga (ZNGA) Experienced 14.8% Drop Since Last Income Report

ZNGA Q4 Loss Despite Growth for the Year

About a month has passed since the latest release of ZNGA. During this period, the stock price fell around 14.8% and lags behind the S&P 500.

Will the recent negative trend for the next income statement continue, or is Zynga expecting a cut? Before we dive into the latest reactions from investors and analysts, let’s take a quick look at ZNGA latest P&L to better understand the important catalysts.

ZNGA reported a loss of 5 cents per share for the fourth quarter of 2020 compared to the previous quarter’s gender equality results. Revenues rose 52.3% year over year to 616 USD million, which led to increased real-time services and benefits from acquisitions of Peak and Rollic.

The contributions of the Social Slots portfolio, Words With Friends, CSR2, Empires & Puzzles, Casual Cards portfolio, and Rollic’s hyper-casual portfolio helped improve earnings over the quarter. It was also very positive to see the increase in player engagement for the recently released Harry Potter: Puzzles & Spells. Zack’s consensus estimates for revenue and earnings were set at 9 cents per share and $676.6 million, respectively.

Orders totaled $699 million, up 61.3% from a year ago. This growth potential is driven by large volumes of mobile orders. The consensus forecast for the order was stable at $675.5 million.

Quarterly information

Zynga’s online gaming or consumer payments revenue (80.9% of total revenue) was $498.6 million, up 53.6% year over year. In addition, advertising revenue (19.1% of total sales) and advertising orders (16.7% of total orders) increased by 47.1% and 46.8% year-on-year to $111.4 million and $117 million, respectively. This increase in advertising revenue was driven by high demand for vacations, along with a contribution to the first quarter of Rollic’s hyper-casual portfolio.

Mobile sales (96.6% of total sales) and mobile reservations increased by 54% and 63.4% year-on-year to $555.3 million and $679.7 million, respectively. This increase is driven by high-performance living services.

Geographically, U.S. income (59.8% of total income) reached $411 million, an increase of 63.9% over the same period last year. In addition, international sales (38.3% of total sales) increased 50.4% to $235.7 million, driven by impressive growth in Asia.

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Tyree Bowman
Identifying robust investment ideas in the tech and crypto industry for adding growth and diversification to a portfolio, Tyree will regularly contribute to Moneymidnight.com to help readers generate new investment ideas and stocks that will add long term value in their investment strategy.
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