Shares of Zynga Respond to Sterne Agee's Consensus Estimate Concerns

Shares of Zynga, Inc. (NASDAQ: ZNGA) fall as much 12.41% following Sterne Agee analyst Arvind Bhatia's concern over estimates and expectations. Bhatia wrote that he sees risks to consensus estimates for the fourth quarter, first quarter and FY2014 estimates based on current traffic trends for Zynga's key titles. The analyst wrote, "The Street is expecting fourth quarter to represent the 'bottom' and bookings to begin growing in the first quarter. Based on current traffic patterns, this seems unrealistic."

Sterne Agee forecasts $130 million and $116 million in bookings in the fourth and first quarter, respectively. Bhatia's prior expectations were at $137 million per quarter.

The analyst noted that the company's big hits with desktop and laptop games "Farmville" and "Mafia Wars" have continued to decline. Zynga is trying to tap into smartphone and tablet games. The company had also considered to offer online casino-style games in the United States, but decided against going forth with those plans.

Sterne Agee rates Zynga as Neutral. According to Bloomberg data, Zynga has twenty-five analyst ratings with 1 buy, 4 sells, and 20 holds. The average price target in $3.71.

Zynga closed at $4.03 on Wednesday.