Is Zynga(NASDAQ:ZNGA) The Right Mobile Gaming Company for Investment?


As the video game industry gains momentum in the stock market, a San Francisco based company, Zynga (NASDAQ:ZNGA) has been noted to perform well in the past year. Zynga is a social video game product provider that is played on various social media platforms and videogames. This article will take you through its business model and why you should choose Zynga (NASDAQ:ZNGA) as an investor. 

History of Zynga(NASDAQ:ZNGA)

FarmVille, Zynga Poker, and Words with Friends are some of the web-browser based games that fetched early success for Zynga (NASDAQ:ZNGA). As technology progressed, gaming shifted from web-browsers to tablets and mobile phones. This transformation dropped the stocks of Zynga to $2, similar to 2012, and remained so for the next few years. 

The tables turned for Zynga(NASDAQ:ZNGA) in 2016 with the hiring of Frank Gibeau, Electronic Arts former executive. The management team of Zynga and Gibeau went forward with making smart acquisitions and monetizing a strong portfolio of hit mobile games. 

Zynga has been through ebb and tide, yet built itself to be a leading mobile game company with an enormous number of loyal users. New acquisitions have always been Zynga’s strategy. Recently it purchased Rollick, a ‘hyper-casual’ videogame developer. With games by Rollick topping the downloaded charts, Zynga’s mission statement ‘connecting the world through games’ is proved true. 

Growth Rate of Zynga(NASDAQ:ZNGA) 

The Q2 earnings that were released in August is an example of how gaming companies are performing well in the market. Zynga(NASDAQ:ZNGA) witnessed the highest quarterly revenue and bookings, and excellent quarterly operating cash flow if compared to the past 8 years. There was an increase of 47% in Zynga’s year-over-year revenue. A $388 million revenue from online games was a major driving factor behind the increase. This also indicates that Zynga users are consistent with in-app purchases. 

Recently Zunga upped its yearly revenue and bookings guidance. It also acquired Peak Games for $1.8 billion during Q2. Smart acquisitions and steady earning growth makes Zynga(NASDAQ:ZNGA)  a successful company despite being a small one. 

Investors looking for some exposure in the mobile gaming industry can certainly opt for investment in Zynga(NASDAQ:ZNGA). The stocks have increased by over 50% year-to-date. Currently, the stocks are being traded at $9.58 a share. The amount suggests affordability for investors who can expect the company to grow by leaps and bounds. 

Mobile gaming has become a go-to for people during this pandemic. The games by Zynga(NASDAQ:ZNGA) have been able to capture the market and keep its users hooked. To know more about Zynga’s stocks, check out their Q3 earnings due on 4th November.