Zynga (ZNGA) closed the most recent trading day at $6.13, moving +1.49% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.58%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, added 0.48%.
Heading into today, shares of the maker of "FarmVille" and other online games had lost 3.67% over the past month, lagging the Consumer Discretionary sector's gain of 2.91% and the S&P 500's gain of 3.62% in that time.
Wall Street will be looking for positivity from ZNGA as it approaches its next earnings report date. The company is expected to report EPS of $0.05, up 150% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $361.57 million, up 54.56% from the year-ago period.
ZNGA's full-year Zacks Consensus Estimates are calling for earnings of $0.22 per share and revenue of $1.46 billion. These results would represent year-over-year changes of +175% and +50.62%, respectively.
Investors should also note any recent changes to analyst estimates for ZNGA. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.5% lower. ZNGA is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, ZNGA is currently trading at a Forward P/E ratio of 27.28. This valuation marks a premium compared to its industry's average Forward P/E of 19.94.
It is also worth noting that ZNGA currently has a PEG ratio of 1.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Gaming was holding an average PEG ratio of 1.29 at yesterday's closing price.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 204, which puts it in the bottom 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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