ZNGA has already added 14.5% in 2019
The shares of Zynga Inc (NASDAQ:ZNGA) are up 1.8% to trade at $4.50 this morning, after Goldman Sachs initiated coverage on the game developer with a "buy" rating and $5.30 price target. This comes as Zynga prepares to report its fourth-quarter earnings next Wednesday, Feb. 6.
Goldman's price target represents 20% upside from ZNGA's closing perch yesterday of $4.42. The shares have started 2019 off strong, adding 14.5% and relying on support from their ascending 10-day moving average. As such, the security is in striking distance of its June 7 four-year high of $4.57.
There is certainly room for more bullish analyst attention. While nine of the 13 brokerages in coverage of ZNGA rate it a "buy" or better, the stock's consensus 12-month price target of $4.76 is a 5.8% premium to current levels.
Shorts have continued to pile on, and a capitulation of these bearish bets could also power ZNGA higher. Short interest increased by 19% in the last two reporting periods to 70.21 million shares -- the most in nearly four years. This represents a healthy 9% of the stock's total available float, and more than a week's worth of buying power, at its average daily trading volume.