Last Month's Best-Performing Tech Stocks

Why did Zynga, Yelp, and Facebook shares have double-digit percentage increases in February? Will those gains continue in the future?

Mar 3, 2014 at 10:30AM

February financial reports brought good tidings for a trio of tech companies. Zynga (NASDAQ:ZNGA)  was up over 48% thanks to news of a mobile acquisition and an IPO filing from competitor King. Yelp (NYSE:YELP) shares rose over 31% following a positive earnings report and a partnership with Yahoo! (NASDAQ:YHOO). Facebook (NASDAQ:FB) shares finished the month up nearly 28% following a stellar fourth-quarter and a multi-billion dollar app purchase.     

What were the details that drove these companies higher, and what's next?

Clumsy Ninja Zynga

Source: NaturalMotion

Zynga acquires mobile superstar 
The social gaming company was scheduled to report fourth-quarter earnings in the first week of February, but jumped the gun by a week. However, an important bit of news within was enough to carry Zynga's gains on into the month. 

Zynga announced the acquisition of mobile gaming company NaturalMotion, which produced the popular titles CSR Racing and Clumsy Ninja. NaturalMotion's Euphoria game development engine was used to create Clumsy Ninja, as well as some of the top console titles in recent years, including Red Dead Redemption and Grand Theft Auto IV.  

The NaturalMotion acquisition offset the fact that the fourth-quarter still had some weak metrics. Daily active users were down 52% year-over-year and monthly active users were down over 62%. Zynga's web revenue is overly dependent on three games. But, another positive distraction came when competitor King's IPO filing showed that the Candy Crush Saga creator is more dependent on even fewer games.

Zynga still needs to work on its user retention problem, but February was the best month for the company since it went public.   

Yelp bags another partner
The online review company reported fourth-quarter revenue of $70.7 million, a 73% year-over-year increase. Net loss for the quarter shrank from $0.08 in 2012 to $0.06 in 2013. For the full year, Yelp's average unique monthly users grew 39% and active local business accounts grew 69% to 67 thousand.  

Yelp competes with free online review services such as those found in Google search results. But, Yelp has had success forming partnerships and already appears in Apple Maps and Microsoft's Bing search results.Plus, February added a partnership with Yahoo! to embed the former's reviews into the latter's search results, according to the Wall Street Journal. The action would look similar to how Google integrates its own review system in relevant searches. Financial details for the Yelp-Yahoo! deal were not disclosed. The deal is more important to Yahoo!, which needs to keep up with Google, than to the partner-happy Yelp. 

Facebook soars on mobile and a pricey acquisition
Facebook had a great February thanks to its fourth-quarter report at the end of January. Revenue grew 63% year-over-year to $2.59 billion, with over 90% coming from advertising. More than half of that ad revenue came from mobile. This fact is notable because mobile is notoriously difficult to monetize and Facebook has hit a few bumps with its applications. 

One of the company's remaining weak points remains user growth in emerging markets. But, the social networking giant took a large, expensive step toward solving that problem with the $19 billion acquisition of WhatsApp.

The texting application is more popular overseas than domestically. Both companies claim WhatsApp will remain ad-free and cheap, at less than one dollar per year, but what the buy really gives Facebook is user data on customers not currently within the fold. Plus, more data means better targeted advertising on Facebook's own platform, which should lead to more revenue. 

Foolish final thoughts 
Facebook has proven it can monetize mobile, while Yelp will continue to sign up partners. Time will tell how Zynga and Facebook will utilize their acquisitions to patch weak spots in their businesses. Yelp's partnership with Yahoo! was likely lucrative, but also means more for the search engine company than for Yelp.  

Want more tech companies achieving large growth?
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Brandy Betz has no position in any stocks mentioned. The Motley Fool recommends Facebook, Yahoo!, and Yelp. The Motley Fool 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers