Zynga has completed the acquisition of Istanbul-based hyper-casual game developer Under the terms of the deal, Zynga purchased 80% of the company for approximately $180 million in cash. The mobile game developer Zynga will acquire the remaining 20% of Rollic with additional payments over the next three-year period.
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With the Rollic acquisition, Zynga (ZNGA) will debut in the fast-growing hyper-casual market.
Zynga’s CEO Frank Gibeau said “Rollic brings Zynga into the world of hyper-casual, which is one of the most exciting and fastest growing mobile gaming categories. Rollic’s large and diversified audience base will also be valuable for Zynga as the mobile games and advertising landscape continues to grow.” (See ZNGA stock analysis on TipRanks).
On Oct. 2, KeyBanc analyst Tyler Parker maintained a Buy rating on the stock and a price target of $12.5 (34.1% upside potential). The analyst noted that Zynga has driven significant margin expansion since 2016, and that he expects margins in 2021 to outperform the Street consensus. The analyst believes that Zynga is undervalued at current levels.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 11 Buys, 2 Holds and 1 Sell. The average price target of $11.87 implies upside potential of about 27.4%. Shares are up about 52.3% year-to-date.
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