Why Zynga Is Poised to Keep Plunging

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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 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, Calif. (2007)

Market Cap

$2.8 billion

Industry

Home entertainment software

Trailing-12-Month Revenue

$1.3 billion

Management

Founder/Chairman/CEO Mark Pincus

CFO Mark Vranesh

Return on Equity (average, past 3 years)

(2.9%)

Cash/Debt

$1.3 billion/$100.0 million

Competitors

DeNA

Electronic Arts

Gameloft


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

On CAPS, 50% of the 661 members who have rated Zynga believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, tunafizzle, summed up the Zynga bear case for our community:

Absurdly overvalued. Almost a billion shares out there, market cap is [$3 billion] for a company [whose] profits are negative and has zero products coming out. Any games they do generate revenue on are tied to [Facebook ]. ... Lawsuits, over-valuation, no long term model will make this a penny stock soon. Short it long.

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The article Why Zynga Is Poised to Keep Plunging originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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