Zynga (NASDAQ:ZNGA) is one of the most watched low-capped shares on the market. The makers of the once-chart-topping mobile game Farmville saw a resurgence in recent months. But in the last week shares have declined. Currently, ZNGA stock is selling for $5.94 USD, down from June’s earlier high of $6.49 USD.
Let’s check in with one of the technology sector’s most sought after small-priced shares.
Despite the recent fall, ZNGA stock has still managed to double year-to-date. A resilient force in the over-populated mobile-gaming market, the company’s successful games—including the aforementioned FarmVille—are to thank for its longevity. Other popular titles keeping Zynga on the radar include Slots, CSR, and Zynga Poker.
Last quarter, Zynga’s revenue rose 27% annually in response to its booking surge of 64%. The growth was a direct result of clever acquisitions of Gram Games and Small Giant Games—the former gave Zynga total control of the popular game Merge Dragons.
ZNGA stock reflected this success. But, of course, it isn’t plain sailing.
One issue faced by the company is a declining user base due to declines in its older once-popular games. To offset this, though, the company has increased its revenues per user.
According to The Motley Fool, the figures look like this:
“Mobile DAUs (daily active users) dipped 2% annually to 22 million last quarter, as its mobile MAUs (monthly active users) declined 12% to 72 million. Meanwhile, its average mobile daily bookings per DAU surged 80% to $0.17, thanks to its acquisitions, in-app purchases, and sales of more in-game ads.”
Zynga and SnapChat
Now, the company has tied itself to mobile platform Snap (NYSE:SNAP), and the pair have developed a Snapchat game called Tiny Royale. The game is a mobile battle-royal style game allowing for up to 30 players and the first of its type on the social platform.
As SnapChat is popular, the move is a clever one for Zynga; the company gets the early-bird advantage of the platform’s in-app games. Currently, Snapchat boasts more daily active users than “Zynga’s entire ecosystem,” and it was early integration with Facebook that gave the game maker its initial success with Farmville.
It’s possible that the Snap partnership will make Zynga a dominant game publisher for a major social network again. This gives ZNGA stock a lot of potential to grow.
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