BofA Upgrades Zynga On Accelerating Ad Strategy: What You Need To Know

The Chartboost acquisition has positioned Zynga Inc ZNGA for a “strategic pivot” toward higher growth and higher margin advertisement technology much sooner than was expected, according to BofA Securities.

The Zynga Analyst: Ryan Gee upgraded Zynga from Neutral to Buy and raised the price target from $12 to $13.50.

The Zynga Thesis: A strategic move from publisher to platform has significantly boosted the value of Zynga's network, Gee said in the upgrade note.

“Strong 1Q results, sustainable double-digit organic growth, increasing Intl. reach, and multiple cross-platform titles in development underpin our view ZNGA is in a better position now than at any point in its history on mobile,” the analyst said. 

“Chartboost and Rollic’s impact on acquisition exhibit platform-like qualities that warrant a gradual multiple re-rating above game publishers toward ad-tech peers.”  

This move has several immediate and long-term benefits, including cost savings “as ZNGA drives UA-spend through its own network,” new revenues via third-party app monetization and distribution, and the combination of first-party and third-party data “enhances the value of ZNGA’s own platform making it more attractive as an ad partner and/or potential acquirer,” Gee said. 

ZNGA Price Action: Shares of Zynga were up 3.11% to $10.46 at the time of publication Thursday.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: Analyst ColorUpgradesPrice TargetAnalyst RatingsBofA SecuritiesRyan Gee
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!