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Zynga (ZNGA) Outpaces Stock Market Gains: What You Should Know

Zynga (ZNGA) closed the most recent trading day at $7.61, moving +1.87% from the previous trading session.

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This story originally appeared on Zacks

Zynga (ZNGA) closed the most recent trading day at $7.61, moving +1.87% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.74%.

- Zacks

Coming into today, shares of the maker of "FarmVille" and other online games had lost 3.49% in the past month. In that same time, the Consumer Discretionary sector lost 2.25%, while the S&P 500 gained 1.34%.

ZNGA will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2021. On that day, ZNGA is projected to report earnings of $0.06 per share, which would represent year-over-year growth of 300%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $664.28 million, up 5.78% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.35 per share and revenue of $2.81 billion, which would represent changes of +400% and +23.85%, respectively, from the prior year.

Any recent changes to analyst estimates for ZNGA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ZNGA is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that ZNGA has a Forward P/E ratio of 21.17 right now. This represents a discount compared to its industry's average Forward P/E of 23.07.

The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ZNGA in the coming trading sessions, be sure to utilize Zacks.com.



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