Analysts Divided Over Zynga's Outlook Following Public Debut

Analyst firm Wedbush Securities sees good things in Zynga's future, giving the firm an "outperform" rating on Monday that stands in stark contrast to the "underperform" given last week by Sterne Agee.
Now that Zynga has made its debut on the stock market, analyst firm Wedbush Securities has given the company an optimistic "Outperform" rating, with a 12 month price target of $12.50 per share. This optimistic figure stands in stark contrast to estimates from Sterne Agee, which last week gave the company a target price of just $7 per share -- significantly lower than Friday's opening price of $10. With such wildly different estimates, analysts are clearly divided over the future of the social gaming powerhouse. Wedbush's Michael Pachter noted that he believes Zynga is "well-positioned for long-term growth," particularly due to emerging opportunities in the mobile space and the company's ability to drive ad revenue. In a prior report, however, Sterne Agee's Arvind Bhatia noted that Zynga's growth has slowed down considerably in recent months, noting that many of its major titles, like CityVille and FarmVille, have already reached their peak user counts. In addition, Cowen and Company last week gave the company a "Neutral" rating, and pointed to "significant concerns" regarding the company's potential for growth in the coming months. After its first day on NASDAQ, Zynga saw its share price drop by 5 percent, settling at $9.50 per share by market close. Trading today closed at $9.05, with shares selling for as low as $8.75.

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