Zynga Rises 7.1% Despite Quarterly Loss

Shares of Zynga, Inc. (ZNGA) rallied 7.1% in Monday’s extended trade after the social games developer reported third-quarter revenue growth of 40% to $705 million. Zynga had recorded revenue of $503 million in the same quarter last year.

Segment-wise, while online game or user pay revenue increased 31% year-over-year due to the impact of the change in deferred revenue, bookings slipped 5%. Meanwhile, revenue and bookings of advertising & other unit stood at $134 million, both up 99% year-over-year, primarily driven by the addition and strong performance from Rollic’s hyper-casual portfolio.

The company reported a quarterly loss of $0.04 per share against a loss of $0.11 per share in the same quarter last year. (See Zynga stock chart on TipRanks)

Average mobile daily active users (DAUs) of 38 million climbed 21% year-over-year. Also, the average mobile monthly active users (MAUs) of 183 million increased 120%. The growth can be attributed to the addition of Rollic’s hyper-casual portfolio.

Zynga’s CEO, Frank Gibeau, said, “Today, we are raising our full year 2021 guidance and are on track to finish the year with Zynga’s best-ever annual topline performance and the largest mobile audience in the company’s history. We are well positioned for 2022 and beyond with multiple growth catalysts in place to drive our continued expansion.”

Q4 & FY 2021 Guidance 

In the fourth quarter, Zynga expects to report $675 million in revenues, up 10% year-over-year. It expects bookings of $715 million, up 2% year-over-year.

For 2021, the company expects to deliver $2.78 billion in revenue, up 41% year-over-year, against the previous guidance of $2.73 billion. Bookings are anticipated to rise 24% year-over-year to $2.81 billion, slightly above the prior estimate of $2.8 billion.

Zynga expects to generate a net loss of $97 million in 2021, down from the previously expected loss of $135 million.

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Wall Street’s Take

Following the release, BMO Capital analyst Gerrick Johnson maintained a Buy rating on Zynga with a price target of $11 (57.4% upside potential).

Overall, the stock has a Strong Buy consensus rating based on 8 unanimous Buys. The average Zynga price target of $11.44 implies 63.7% upside potential from current levels.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Zynga’s performance.

According to the tool, the number of total unique visitors for September 2021 on all devices stands at 1.2 million, down 39.1% year-over-year. On a year-to-date basis, the number of total unique visitors to the company’s website fell 42.1% from the comparable period last year.

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