Aug 8 Zynga Inc's investors will have
to wait until at least next year to see if the company can grow
profitably, analysts said after the "Farmville" creator cut its
2014 revenue outlook.
At least eight brokerages cut their price targets on the
stock, by as much as $2 to a low of $2.83.
"It's now a 2015 story," said Jefferies analyst Brian Pitz,
who has a "hold" rating on the stock.
Zynga's shares fell as much as 7 percent to a 14-month low
of $2.71 in heavy early trading on the Nasdaq on Friday.
The company, which has not made an annual profit since going
public in 2011, said on Thursday it had delayed the launch of
new versions of several titles, including "Zynga Poker" and
"Words with Friends" as well as mobile games from Natural
Motion, a studio it bought in January for $527 million.
Zynga said it now expected to get revenue from the new
titles in 2015.
"Lowered guidance for 2014 and an accompanying reduction in
Street estimates for (2015) may help investors to feel that
numbers will now be reset to a point where they are more
achievable," Piper Jaffray analyst Michael Olson said in a note.
Olson has a "neutral" rating on Zynga's stock.
Zynga is also investing in sports games by entering into a
licensing deal with the National Football League for its "NFL
Showdown" game and has partnered with Tiger Woods to develop a
mobile golf game for release in 2015.
Janney Capital analyst Tony Wible said that while Zynga's
strategy of obtaining expensive rights to develop sports games
could help it retain players, it also increased risks for the
"Zynga cannot afford to pay more money for games that fail,"
said Wible, who has a "neutral" rating on the stock.
Zynga's shares were down 5.8 percent at $2.75, with more
than 30 million shares trading in the first 50 minutes, compared
with the 50-day daily moving average of about 22 million.
Up to Thursday's close, the shares had fallen 17 percent
since the start of the year and about 70 percent since the
company went public at $10 per share.
Of the 23 analysts covering the stock, two have "buy" or
higher rating, 18 have a "hold" or equivalent, and three have a
"sell", according to Thomson Reuters data.
(Reporting by Soham Chatterjee in Bangalore; Editing by Ted