Investing.com - Zynga rallied nearly 6% on Thursday as its better-than-expected quarterly results and firmer guidance prompted bullish calls from analysts.
Zynga (NASDAQ:ZNGA) raised its full-year 2019 revenue guidance to $1.2 billion, an increase of $50 million from its prior guidance.
The firmer outlook on revenue growth was underpinned by solid first-quarter growth, with the social games developer beating estimates on both the top and bottom lines.
The company delivered first-quarter earnings of $0.07 a share on revenue of $359.48 million, handily beating estimates from Investing.com.
Mobile revenue rose 35% to a record $246 million for the quarter, and mobile bookings rose 77% to a record $341 million.
The record quarter of growth doesn't appear to be a one-hit wonder as the company also raised its bookings guidance to $1.45 billion, an increase of $100 million from its prior forecast.
That was more than enough to trigger a wave of bullish calls from analysts.
Baird upgraded Zynga to outperform from neutral and raised its target price on the stock to $8 from $5, implying a 38% upside from its current price of $5.78.
Barclays (LON:BARC), citing easing concerns on outlook for growth and margins, raised its price target on the stock to $6 from $4.60.
Gaming stocks rode the Zynga wave higher, with Activision Blizzard (NASDAQ:ATVI) and Take-Two Interactive Software (NASDAQ:TTWO) higher on the day. Electronic Arts (NASDAQ:EA) was the notable exception.
Activision will provide investors with further insight into gaming stocks when it releases its results after the U.S. market closes.
The company has come under pressure as its slate of games has failed to drum up significant demand in the wake of pressure from titles like Fortnite.
Activision stock is up more than 5% this year, but that's well behind gains in the S&P 500 of about 17%.
The gaming company is expected to report earnings of 24 cents a share on revenue of $1.23 billion, according to estimates from Investing.com. The EPS estimate is 37% off from a year ago's 38 cents. Revenue would be down 10.9% from a year ago's $1.38 billion.