On Monday, Zynga shares got a buy rating from analyst at BMO who initiated coverage of the shares. The game maker got a $15 share-price target from BMO.
Analyst Gerrick Johnson called Zynga the “leading player in the mobile games market”. Johnson also noted that the mobile games market is the fastest growing segment in the rapidly growing video games industry.
Johnson mentioned that Zynga, which specializes in free-to-play social games, uses live services bolstered by solid data analytics to boost in-game monetization and returns from advertising. "We think ZNGA has a competitive advantage in creating deeper relationships with its players over other mobile competitors," the analyst said.
According to Johnson, acquisition has been a key strategy for Zynga, and he estimates that the company holds around 2.5% market share of the “highly fragmented mobile games market". Johnson mentioned that Zynga has pursued aggressive acquisition of companies with attractive properties wherein “it layers higher margin live services or advertising supported by its superior data analytics."