As of December 15, 2025, Zynga Inc has a Discounted Cash Flow (DCF) derived fair value of $12.52 per share. With the current market price at $8.18, this represents a potential upside of 53.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $5.36 |
| DCF Fair Value (10-year) | $12.52 |
| Potential Upside (5-year) | -34.5% |
| Potential Upside (10-year) | 53.0% |
| Discount Rate (WACC) | 6.2% - 8.5% |
Revenue is projected to grow from $2800 million in 12-2021 to $10805 million by 12-2031, representing a compound annual growth rate of approximately 14.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 2800 | 42% |
| 12-2022 | 3086 | 10% |
| 12-2023 | 3277 | 6% |
| 12-2024 | 4014 | 22% |
| 12-2025 | 4852 | 21% |
| 12-2026 | 5765 | 19% |
| 12-2027 | 6751 | 17% |
| 12-2028 | 7737 | 15% |
| 12-2029 | 8784 | 14% |
| 12-2030 | 9844 | 12% |
| 12-2031 | 10805 | 10% |
Net profit margin is expected to improve from -4% in 12-2021 to 8% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | (104) | -4% |
| 12-2022 | 40 | 1% |
| 12-2023 | 90 | 3% |
| 12-2024 | 165 | 4% |
| 12-2025 | 263 | 5% |
| 12-2026 | 384 | 7% |
| 12-2027 | 466 | 7% |
| 12-2028 | 552 | 7% |
| 12-2029 | 647 | 7% |
| 12-2030 | 748 | 8% |
| 12-2031 | 845 | 8% |
with a 5-year average of $17 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 23 |
| 12-2023 | 28 |
| 12-2024 | 34 |
| 12-2025 | 40 |
| 12-2026 | 51 |
| 12-2027 | 60 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 37 |
| Days Inventory | 0 |
| Days Payables | 53 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2022 | 96 | 6 | 28 | 129 | (67) |
| 2023 | 196 | 17 | 40 | 0 | 140 |
| 2024 | 305 | 31 | 49 | (4) | 230 |
| 2025 | 444 | 49 | 59 | 93 | 243 |
| 2026 | 615 | 72 | 70 | 46 | 427 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 5.36 | -34.5% |
| 10-Year DCF (Growth) | 12.52 | 53.0% |
| 5-Year DCF (EBITDA) | 3.17 | -61.2% |
| 10-Year DCF (EBITDA) | 7.08 | -13.5% |
Is Zynga Inc (ZNGA) a buy or a sell? Zynga Inc is definitely a buy. Based on our DCF analysis, Zynga Inc (ZNGA) appears to be significantly undervalued with upside potential of 53.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $8.18.