SAN FRANCISCO — Zynga will make its first quarterly report as a public company Tuesday afternoon, with analysts looking for a strong jump in revenue and a small profit from the social game maker.
The results will be watched especially closely given the strong run-up that Zynga’s shares experienced over the past two weeks — part of the Facebook “halo effect” that followed the first initial public offering (IPO) filing from the social-networking giant. Zynga’s stock has jumped 28 percent since Feb. 1, when Facebook filed its first S-1 papers with the Securities and Exchange Commission.
Zynga moved up 1.6 percent to $13.62 early Tuesday, about 36 percent above its IPO price of $10. The stock had fallen about 17 percent in the weeks following its Dec. 16 debut before bouncing back.
“There’s certainly some downside risk to the stock, given the updraft since the Facebook filing,” Colin Sebastian of Robert W. Baird said in an interview, who maintains a buy rating on the shares. “The risk/reward scenario is a little different at these levels.”
Zynga is best known for popular Facebook games such as “CityVille,” “FarmVille,” “Texas HoldEm Poker” and “Words with Friends.” Its newly-launched “Hidden Chronicles” also has been a popular draw, last ranking as the fourth most popular game on Facebook by AppData since its launch last month.
Zynga generates revenue mainly from the sale of “virtual goods” within those games, about 30 percent of which goes to Facebook. According to Facebook’s IPO filing, Zynga accounts for about 14 percent of the company’s total revenue — making the company Facebook’s largest single revenue source outside of its core advertising business.
Analysts expect Zynga to report earnings for the quarter ended Dec. 31 of three cents a share on revenue of $302 million, according to consensus estimates from FactSet Research. The company had revenue of $195.8 million in the same quarter a year before. Per-share earnings data for that period are not available.
Zynga also is expected to report its total bookings for the quarter, which reflects the total amount of virtual goods and advertising sales booked in the period, a portion of which gets deferred to future periods in terms of revenue recognition. For the nine-month period ended Sept. 30, Zynga reported bookings of about $849 million, with reported revenue totaling $828.9 million.
Other metrics watched for by analysts will include daily average users (DAUs) and monthly average users (MAUs) for the company’s games.
On these metrics, Zynga remains the most popular game developer on Facebook by a wide margin. The company last said it had about 246.3 million MAUs on the social network, according to AppData, a third-party service. Its nearest competitor, game publisher Electronic Arts, had about 47.6 million MAUs, AppData said.
Still, the recent run on the company’s stock price has made some analysts concerned. The stock is currently trading about 65 times estimated earnings for 2012.
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