The mobile gaming niche is one that does not usually attract a lot of investor activity. However, it seems Glu Mobile Inc. (NASDAQ:GLUU) is rewriting the script.
The company is rising for the second straight year, and by huge margins. Notably, the most recent earnings results presented an all positive picture.
Glu Mobile Inc games franchise performing well
Interestingly, Glu Mobile’s creations are showing some market resilience with a long shelf life. In particular, the company has three games that are generating a lot of income. These are Deer Hunter, Kim Kardashian: Hollywood and Design Home.
According to Q3 2018 results, Design Home is the best performing game so far in the Glu Mobile suite. Particularly, the quarter saw the game peaking at the five top grossing games on U.S. App Store for iPhone.
And it is not only Design Home. The company boasts of another game franchise whose following is growing as every quarter passes. Major League Baseball-licensed Tap Sports Baseball franchise is proving to be a favorite among gamers.
In addition to the games, the Glu Mobile provides bookings guidance to customers. Interestingly, the company issued fresh bookings guidance for 2018, which is evidence of the great performance in the sector. In particular, the firm raised the guidance to between $380.7 million and $382.7 million.
Share price performance
Glu Mobile’s stock is seeing a lot of action lately. Further, the stock has much coverage by analysts. In the past few months, the stock rose 20%, and it looks like it is not yet done with the trend. At the moment, the stock is worth 8.08 per share.
Interestingly, the share price exhibits a high beta meaning it is highly volatile. As such, it is highly likely for the price to sink lower than it is today, which is a buying opportunity.
However, the price enjoys support by both the 50-day and the 200-day moving averages. In particular, MA (50) is a bit higher than its MA (200) counterpart. The former establishes support at 6.95 while the latter rests at 5.97.
Interestingly, the implication of this is that as much as the stock is doubling quarterly, it is still cheap. Although September saw the share price fall a little, it was still over 100% higher than the one year low.
Other indicators like the Relative Strength Index (RSI) show a positive trend for the share price. In particular, the 14-day RSI value for the stock is 62.59. Since this value tends towards the 100 maximum value, it is clear that the share price has strong momentum.
In the first nine months of 2018, Glu’s revenue is up 31%. However, this is a small value compared to the 43% it registered last year. Although a few losses are being reported here and there, they are not enough to change the growth trajectory.
Interestingly, the company’s future outlook regarding growth is getting better. Evidently, the company has revised its 2018 guidance on more than one occasion. The latest guidance is still an upward revision. In particular, the latest revision puts Q3 revenue performance from $380.7 million to $382.7 million.
In a recent note by Cowen, an investment bank and financial services company, the firm will seemingly post more growth. Notably, the firm termed Glu Mobile the best idea for 2019.
Clearly, for a stock that is up 94.5% year-to-date, 2019 has a lot to offer. Interestingly, the immediate aftermath of the Cowen note saw Glu’s stock rise 7.3%.
In the note, Cowen reiterated its Outperform rating for Glu. The firm expects Glu’s stock to advance to between $8 and $9.5 in the succeeding quarters.