Analyst firm Wedbush Securities believes that there is still room for social games giant Zynga's share price to further appreciate, although it doesn't think the company's online gambling plans are as solid.
Although Zynga's stock price initially floundered
, it improved following news that Facebook had filed for an initial public offering
. In a new analysis report, Wedbush's Michael Pachter has now said that Zynga is in a good position to further improve its stock thanks to recent releases.
In particular, he noted that Zynga has hired a number of former EA executives, including EA mobile lead Barry Cottle
, putting the company in the position to develop "compelling content" in the near future.
"[We] think that having true game people in charge of its operations will position it to execute well on its business plan," he added.
With this in mind, Pachter believes Zynga may well double its current revenues by 2013, with plenty of room for growth beyond that.
However, he does not think that Zynga's venture into the online gambling space
will be as successful, given that there are plenty of other companies that already have gambling userbases and loyalty programs that will provide advantages over Zynga.
"We do believe that Zynga could leverage its large base of free-to-play poker players to drive traffic to gambling sites, and believe that there is a meaningful revenue opportunity; however, we don't think the opportunity is as large as many have estimated," he noted.