ZNGA

Zynga Inc

TMT


Presented:11/14/2019
Price:$6.31
Cap:$5.97B
Current Price:$8.18
Cap:$9.30B

Presented

Date11/14/2019
Price$6.31
Market Cap$5.97B
Ent Value$5.48B
P/E Ratio164.75x
Book Value$2.05
Div Yield0%
Shares O/S945.92M
Ave Daily Vol18,004,296
Short IntN/A

Current

Price$8.18
Market Cap$9.30B
Zynga, Inc. provides social game services. It develops, markets and operates social games as live services played on mobile platforms such as Apple's iOS operating system and Google's Android operating system, and social networking sites such as Facebook. It offers Chess with Friends, Crazy Cake Swap, Draw Something, FarmVille, Gems with Friends, Ice Age: Arctic Blast, Looney Tunes Dash, Speed Guess Something, What's The Phrase, Wizard of Oz Magic Match, Yummy Gummy, Free Slots, Black Diamond Casino, Hit It Rich, Zynga Poker and Willy Wonka Slots. The company was founded by Mark Jonathan Pincus on April 19, 2007 and is headquartered in San Francisco, CA.

Publicly traded companies mentioned herein: Electronic Arts Inc (EA), Starbucks Corp (SBUX), Zynga Inc (ZNGA)

Highlights

The presenter is long shares of Zynga Inc (ZNGA), the mobile game creator that focuses on “bite-sized” games that consumers play when they don’t have the time to play more time-consuming games (e.g., when they’re in line at Starbucks). Shares are trading at ~$6 (~17x consensus 2020 EBITDA), but he thinks the Street is mis-modeling ZNGA’s EBITDA margins going forward. The company has consistently kept expectations low with beats and raises over the last three years, and this will continue on the back of margin expansion and strong capital deployment. Based on a modest 15x EBITDA forward multiple, his price target is ~$8.50 per share. 

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Idea Discussion

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