2. Zynga Inc. (NASDAQ:ZNGA)
Number of Hedge Fund Holders: 49
Price as of September 10: $7.99
Zynga Inc. (NASDAQ:ZNGA) is a mobile videogame company based in San Francisco that ranks 2nd on the list of 10 best Robinhood stocks under $20. Zynga Inc. (NASDAQ:ZNGA) develops and licenses videogames played on Android and iOS devices. The company was formerly known as Zynga Game Network Inc. and was founded in 2010.
Despite a shortfall on bookings, BMO Capital analyst Gerrick Johnson kept an Outperform rating on Zynga Inc. (NASDAQ:ZNGA) and maintained his price target for the stock at $11 per share on August 9, noting that the firm maintained its 2021 EBITDA projection.
The company has a market cap of $9.6 billion. In the second quarter of 2021, Zynga Inc. (NASDAQ: ZNGA) reported an EPS of $0.10, beating estimates by $0.01. The company’s revenue in the second quarter came in at $720 million, an increase of 59% year over year, and beat revenue estimates by $40.14 million. In addition, Zynga Inc. (NASDAQ: ZNGA) reported an all-time high of 205 million average mobile MAUs, up 194% year over year. The stock has gained 5.4% in the past twelve months.
At the end of the second quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $1.27 billion in Zynga Inc. (NASDAQ: ZNGA), up from 47 in the previous quarter worth $1.14 billion.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership mentioned Zynga Inc. (NASDAQ:ZNGA) and emphasized their views on the company. Here is what the fund said:
“We also added to our position in Zynga. Our multi-year investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complimentary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets, and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
