FORTUNE — Unlike its social media cousin Facebook, social-gaming company Zynga had a successful IPO. Priced at $10 a share in December 2011, Zynga (ZNGA) went public with a market cap of $7 billion. But after a couple of disastrous quarters — highlighted by a decline in paying players of core games like FarmVille and struggles adapting to mobile platforms — the stock has plummeted to near $2, down 85% from its March high.
Has it fallen too far? A pair of big money managers think so. Janus Capital Management recently bought 23 million shares, and Morgan Stanley (MS) upped its stake from 26 million to nearly 32 million shares. Wedbush analyst Michael Pachter points out that Zynga has $1.6 billion in cash, $1.1 billion in revenue, and 311 million active users. He argues that if CEO Mark Pincus can control costs, attract more paying gamers, and win back Wall Street’s trust — all big ifs — the stock could “double quickly.”
This story is from the December 3, 2012 issue of Fortune.