The first half of 2012 is in the rearview mirror, and investors are gearing up for what looks to be an action-packed ending. There are bound to be some big winners -- and more than a few duds -- no matter what happens in the United States and abroad.
Will your favorite stock have its victory lap as we hit the home stretch, or will it get passed by? First-half performances can hold some clues, so let's look to the recent past to find out whether Zynga
Zynga has been one of 2012's worst-performing stocks, although investors entered 2012 on the rise. Despite an early 50% gain, Zynga's now shed nearly half the value it had on the first trading day of the year.
Here are a few financial snapshots of its recent performance:
|Market Cap||$3.8 billion|
|Trailing 12-Month Revenue||$1.22 billion|
|TTM Net Loss||($491 million)|
|TTM Free Cash Flow||$136 million|
|Most Recent Quarter Revenue||$321 million|
|MRQ Net Loss||($85 million)|
|MRQ Free Cash Flow||$41 million|
|MRQ Revenue / Net Income Y-o-Y Change||32.1% / (600%)|
|P/E and Forward P/E||NM / 48.6|
|Price to Free Cash Flow||27.9|
|Motley Fool CAPS Rating (out of 5)||* (find out more)|
Source: Morningstar. NM = not material because of negative earnings.
What the numbers don't tell you
The story of Zynga's year is very much linked to the story of Facebook's
Despite that acknowledgement, Zynga's first earnings release as a public company underwhelmed investors. The company shook off that setback long enough to make its 2012 high at the start of March, when it announced its own games platform in an effort to strike out on its own, without Facebook. That was the end of Zynga's brief and somewhat unexpected ascent to a 50% gain, and shares have been in freefall ever since.
A secondary offering, largely an excuse for CEO Mark Pincus to unload a lot of shares, not only diluted the small IPO float but also sent the wrong image of a leader cashing out early.
Zynga's first-quarter results beat the Street's expectations but also showed the start of a slowdown in user growth rates. To fend off the appearance of stagnation, Zynga spent $200 million on one-hit-wonder game developer OMGPOP, which briefly held the coveted top spot in Apple's
Since the purchase, OMGPOP's Draw Something has faded fast, and one of its developers walked away from a job at Zynga's offices, calling the company evil and actively destructive. Ouch. Zynga's CTO also left for a gaming start-up last month after falling in love with its technology, strengthening the firmly planted public image of Zynga as a place where nothing matters but the relentless pursuit of monetization.
That's not to say that Zynga hasn't made any positive moves. The company forged a partnership with Hasbro
We at the Fool have warned investors about Zynga's false promise since its IPO. Rule Breakers analyst Tim Beyers calls Zynga a classic "Faker Breaker," a stock that just doesn't deserve its hype. I and my fellow contributors Travis Hoium and Sean Williams were unanimous in our thumbs-down vote on the stock this April, which is a relative rarity in our long-running Top Stock series.
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Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter, @TMFBiggles, for more news and insights. The Motley Fool owns shares of Facebook, American Express, Apple, and Hasbro. Motley Fool newsletter services have recommended buying shares of Apple, DreamWorks Animation SKG, and Hasbro, creating a write covered strangle position on American Express, and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.