Photo Credit:Juan J. Velasco

Zynga Inc CI A (ZNGA) Information Technology – Software| Reports February 10, After Market Closes.

Zynga (ZNGA) is scheduled to report fourth quarter earnings February 10, after the market closes. On the heels of its Q4 2015 earnings, shares of the gamemaker touched a 52 week low of $1.93 per share. Zynga has been unable to replicate the success of FarmVille afters its fallout with Facebook. Moreover, the company has delayed the launch of its two most anticipated games from Q4 2015 to Q1 2016, to the dismay of its investors. As a result, Estimize is calling for EPS of $0.00 and revenue of $181.10, consistent with the company’s downward trend. The Estimize community has been bearish on Zynga’s earnings this quarter, cutting EPS and revenue estimates 5% and6%, respectively, in the past 3 months. With a dwindling user base, the future of Zynga remains uncertain unless it can release a new viral game. 

Despite coming off a positive earnings and revenue surprise in Q3, the best days seem to be behind Zynga. The company has failed to release a hit game since their FarmVille and Texas HoldEm Poker games. Since its partnership with Facebook ended, even its flagship game, FarmVille, has decreased in popularity, after hitting a peak of 80M players in 2010. Two of the company’s most important metrics, daily active user (DAUs) and monthly active users (MAUs) have plunged as the company searches for a new growth catalyst. In Q3, DAUs were down 21% YoY while MAUs were down 27%. Furthermore, Zynga delayed the launch of two new anticipated games, CSR2 and Dawn of TItans, from Q4 2015 to Q1 2016. Due to the delay, the company issued weak Q4 guidance of $-0.01 for EPS and $177.50M for revenues. Zynga appears to be in trouble if it doesn’t deliver another hit game soon, and salvage what’s left of it’s user base.