NasdaqGS:ZNGA

Stock Analysis Report

Executive Summary

Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally.


Snowflake Analysis

Proven track record with reasonable growth potential.


Similar Companies

Share Price & News

How has Zynga's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ZNGA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.9%

ZNGA

-0.4%

US Entertainment

-1.1%

US Market


1 Year Return

41.8%

ZNGA

18.0%

US Entertainment

17.9%

US Market

Return vs Industry: ZNGA exceeded the US Entertainment industry which returned 18% over the past year.

Return vs Market: ZNGA exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

ZNGAIndustryMarket
7 Day2.9%-0.4%-1.1%
30 Day16.9%2.4%1.4%
90 Day13.5%5.1%6.9%
1 Year41.8%41.8%18.8%18.0%20.3%17.9%
3 Year164.1%164.1%54.3%49.3%47.8%38.3%
5 Year210.0%210.0%93.0%81.2%71.9%53.0%

Price Volatility Vs. Market

How volatile is Zynga's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zynga undervalued compared to its fair value and its price relative to the market?

27.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ZNGA ($7.13) is trading below our estimate of fair value ($9.86)

Significantly Below Fair Value: ZNGA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ZNGA is poor value based on its PE Ratio (159.6x) compared to the Entertainment industry average (23.8x).

PE vs Market: ZNGA is poor value based on its PE Ratio (159.6x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: ZNGA is poor value based on its PEG Ratio (4.4x)


Price to Book Ratio

PB vs Industry: ZNGA is overvalued based on its PB Ratio (3.4x) compared to the US Entertainment industry average (2.3x).


Next Steps

Future Growth

How is Zynga forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

36.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZNGA's forecast earnings growth (36.4% per year) is above the savings rate (1.7%).

Earnings vs Market: ZNGA's earnings (36.4% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ZNGA's revenue (11% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: ZNGA's revenue (11% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ZNGA's Return on Equity is forecast to be low in 3 years time (12.5%).


Next Steps

Past Performance

How has Zynga performed over the past 5 years?

42.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ZNGA has a large one-off gain of $314.2M impacting its December 31 2019 financial results.

Growing Profit Margin: ZNGA's current net profit margins (3.2%) are higher than last year (1.7%).


Past Earnings Growth Analysis

Earnings Trend: ZNGA has become profitable over the past 5 years, growing earnings by 42.6% per year.

Accelerating Growth: ZNGA's earnings growth over the past year (171.2%) exceeds its 5-year average (42.6% per year).

Earnings vs Industry: ZNGA earnings growth over the past year (171.2%) exceeded the Entertainment industry -9.8%.


Return on Equity

High ROE: ZNGA's Return on Equity (2.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zynga's financial position?


Financial Position Analysis

Short Term Liabilities: ZNGA's short term assets ($1.6B) exceed its short term liabilities ($792.0M).

Long Term Liabilities: ZNGA's short term assets ($1.6B) exceed its long term liabilities ($893.2M).


Debt to Equity History and Analysis

Debt Level: ZNGA's debt to equity ratio (28.9%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if ZNGA's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: ZNGA has a low level of unsold assets or inventory.

Debt Coverage by Assets: ZNGA's debt is covered by short term assets (assets are 2.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ZNGA is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: ZNGA is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Zynga's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZNGA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ZNGA's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZNGA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZNGA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ZNGA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Frank Gibeau (50yo)

3.9yrs

Tenure

US$9,903,704

Compensation

Mr. Frank D. Gibeau has been the Chief Executive Officer of Zynga, Inc. since March 7, 2016. Mr. Gibeau has been Independent Director at YETI Holdings, Inc. since January 30, 2020. Mr. Gibeau served as an  ...


CEO Compensation Analysis

Compensation vs Market: Frank's total compensation ($USD9.90M) is above average for companies of similar size in the US market ($USD6.39M).

Compensation vs Earnings: Frank's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mark Pincus
Founder & Non Executive Chairman12.8yrsUS$275.00k3.84% $259.1m
Frank Gibeau
CEO & Director3.9yrsUS$9.90m0.28% $18.8m
James Griffin
Chief Financial Officer3.4yrsUS$4.47m0.057% $3.9m
Matthew Bromberg
Chief Operating Officer3.5yrsUS$4.47m0.082% $5.5m
Phuong Phillips
Chief Legal Officer & Secretary2.4yrsUS$1.40m0.023% $1.5m
Bernard Kim
President of Publishing3.7yrsUS$4.61m0.086% $5.8m
Jeffrey Buckley
Chief Accounting Officer2.8yrsno data0.0062% $420.2k
Rebecca Lau
Vice President of Investor Relations & Corporate Finance0yrsno datano data
Jeff Ryan
Chief People Officer2.2yrsno data0.0018% $120.7k

3.4yrs

Average Tenure

51yo

Average Age

Experienced Management: ZNGA's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mark Pincus
Founder & Non Executive Chairman12.8yrsUS$275.00k3.84% $259.1m
Frank Gibeau
CEO & Director3.9yrsUS$9.90m0.28% $18.8m
Janice Roberts
Independent Director3yrsUS$325.00k0.019% $1.3m
William Gordon
Director11.6yrsUS$948.88k0.12% $8.2m
Ellen Siminoff
Independent Director7.6yrsUS$260.00k0.033% $2.2m
Louis Lavigne
Lead Independent Director 2.8yrsUS$355.00k0.032% $2.2m
Carol Mills
Independent Director3yrsUS$312.50k0.019% $1.3m
Regina Dugan
Independent Director5.6yrsUS$265.03k0.025% $1.7m

5.0yrs

Average Tenure

59.5yo

Average Age

Experienced Board: ZNGA's board of directors are considered experienced (5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.8%.


Top Shareholders

Company Information

Zynga Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zynga Inc.
  • Ticker: ZNGA
  • Exchange: NasdaqGS
  • Founded: 2007
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: US$6.744b
  • Shares outstanding: 945.92m
  • Website: https://www.zynga.com

Number of Employees


Location

  • Zynga Inc.
  • 699 Eighth Street
  • San Francisco
  • California
  • 94103
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ZNGANasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDDec 2011
ZY3DB (Deutsche Boerse AG)YesClass A Common StockDEEURDec 2011
0R0JLSE (London Stock Exchange)YesClass A Common StockGBUSDDec 2011
ZNGASWX (SIX Swiss Exchange)YesClass A Common StockCHCHFDec 2011

Biography

Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company’s games are played on mobile platforms, such as Apple iOS and Google’s Android operating systems, as well as on social networking sites, such as Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual items and sponsorships to advertising agencies and brokers; and licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 02:05
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.