Heavy Early Morning Activity On Zynga (ZNGA)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Zynga ( ZNGA) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Zynga as such a stock due to the following factors:

  • ZNGA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.3 million.
  • ZNGA traded 3.7 million shares today in the pre-market hours as of 8:55 AM, representing 18% of its average daily volume.

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More details on ZNGA:

Zynga Inc. develops, markets, and operates online social games as live services played on the Internet, social networking sites, and mobile platforms in the United States and internationally. Currently there are 2 analysts that rate Zynga a buy, 2 analysts rate it a sell, and 14 rate it a hold.

The average volume for Zynga has been 25.6 million shares per day over the past 30 days. Zynga has a market cap of $2.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.74 and a short float of 8.1% with 2.29 days to cover. Shares are down 20% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zynga as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 1580.3% when compared to the same quarter one year ago, falling from $4.13 million to -$61.18 million.
  • Net operating cash flow has significantly decreased to -$24.25 million or 191.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • This stock has managed to decline in share value by 2.02% over the past twelve months. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, ZYNGA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ZYNGA INC is currently very high, coming in at 83.95%. Regardless of ZNGA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ZNGA's net profit margin of -36.41% significantly underperformed when compared to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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