Zynga (ZNGA) shares showed strength Monday morning, after Wedbush Securities added the company to its ‘Best Ideas List’ and reiterated Outperform rating on the stock with a $7 price target.
In a report published today, Wedbush said:[via The Economic Daily] “Zynga overcame a rocky 2013, and CEO Don Mattrick streamlined the company’s cost structure and stabilized its core business, positioning Zynga to grow revenues and profits in 2014. We think that there is potential for shares to appreciate above our target if Zynga’s management executes on Mr. Mattrick’s plan, as we think that contribution margin on bookings growth can exceed 30%. The flexibility inherent in Zynga’s business model makes a return to profitability in 2014 believable, and now that its losses are behind the company, we think investors will once again pay attention.”
Trading at a multiple of 86x next year’s estimated earnings, the stock rose as much as 2.86 percent, and was last up 1.90 percent to $4.28 at 10:04AM in New York today.