NEW YORK (TheStreet) -- Shares of Zynga were gaining 4% to $2.48 on heavy trading volume Friday as the social game publisher rebounded from a sharp loss on Thursday. About 35.9 million shares of Zynga were traded by 3:05 p.m. Friday, well above the social game company's average trading volume of about 18.5 million shares a day. Shares of Zynga fell Thursday after the company announced that CEO Don Mattrick resigned and that founder and former CEO Mark Pincus would retake the position. Mattrick joined Zynga in 2013 after leaving his position as the head of Microsoft's Xbox division. "I am returning to the company that I love in order to accelerate innovation in the most popular categories like Action Strategy and strengthen our focus on our core areas like Invest and Express," Pincus said. "I look forward to partnering with our leaders to intensify our focus on social experiences for the millions of consumers who play our games." TheStreet Ratings team rates ZYNGA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate ZYNGA INC (ZNGA) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 78.8% when compared to the same quarter one year ago, falling from -$25.24 million to -$45.13 million. Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, ZYNGA INC's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has decreased to $4.35 million or 43.80% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 36.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 66.66% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now. ZYNGA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ZYNGA INC reported poor results of -$0.25 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings (-$0.04 versus -$0.25). You can view the full analysis from the report here: ZNGA Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
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