1-Star Stocks Poised to Keep Plunging: Zynga?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online social games operator Zynga (NAS: ZNGA) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Zynga and see what CAPS investors are saying about the stock right now.

Zynga facts

Headquarters (Founded)

San Francisco (2007)

Market Cap

$1.8 billion

Industry

Home entertainment software

Trailing-12-Month Revenue

$1.3 billion

Management

Founder/Chairman/CEO Mark Pincus
CFO David Wehner

Trailing-12-Month Return on Equity

(40.5%)

Cash/Debt

$1.2 billion / $100.0 million

Competitors

Activision Blizzard (NAS: ATVI)
Electronic Arts (NAS: EA)


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 40% of the 879 members who have rated Zynga believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, GenFrogKing, succinctly summed up the bear case for our community:

Zynga has some fun games, yes, and it's powered by Facebook (NAS: FB) , yes. However, the fact that it relies mostly on eCommerce that is optional does not make for a very good business model. Plus, although Facebook is integral to the Internet presently, Facebook has also been declining a lot in popularity (it's just not hip anymore).

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The article 1-Star Stocks Poised to Keep Plunging: Zynga? originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Activision Blizzard and Facebook and has options on Facebook. Motley Fool newsletter services recommend Activision Blizzard, Electronic Arts, and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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