BMO On Zynga: The Best Way To Play The 'Mo-Bull' Gaming Market

Zynga Inc’s ZNGA ability to create deeper relationships with mobile gamers gives the company an edge over its competitors, according to BMO Capital Markets.

The Zynga Analyst: Gerrick Johnson initiated coverage of Zynga with an Outperform rating and a price target of $15.

The Zynga Thesis: The company is a leader in the mobile games market, which is “the fastest-growing segment in the rapidly growing video games industry,” Johnson said in the initiation note.

The pandemic brought new users to mobile, the analyst noted, while adding that mobile gaming may also be boosted by “increased adoption of 5G and the upgrades in handsets it should generate.”

“We see opportunities for ZNGA to enhance monetization in its games through both in-game spending and advertising. The company is also addressing profitable white spaces like adventure and RPG, expanding into new platforms with cross-play, and growing its international reach,” Johnson wrote.

Zynga has the cash flows and balance sheet strength to replicate the success of its recent acquisitions, he added.

ZNGA Price Action: Shares of Zynga had gone down 0.24% to $10.54 at the time of publication Monday.

(Photo: Zynga)