Glu Mobile GLUU shares have skyrocketed 120% since mid-March. This positivity includes a recent surge after the gaming firm boosted its second quarter guidance on the back of stronger-than-expected growth during the coronavirus.
Glu is a mobile video game firm, with a portfolio that includes Deer Hunter, Kim Kardashian: Hollywood, Disney Sorcerer’s Arena DIS, and more. The company’s first quarter revenue jumped 12%. This growth was driven by a 15% climb in bookings, with record quarterly bookings from Design Home and the highest Q1 bookings in the Tap Sports Baseball franchise’s history.
Glu stock has surged 60% in 2020 to crush its peer group’s 14% jump. Plus, GLUU shares have climbed 250% in the last three years to top its peer group’s 26% jump. This group includes Electronic Arts EA, Nintendo NTDOY, Hasbro HAS, Take-Two Interactive TTWO, Activision Blizzard ATVI, and a few others.
More broadly, Glu is poised to expand within the booming global gaming industry that is projected to climb from $151 billion in 2019 to nearly $200 billion by 2022. Better still, mobile gaming is expected to account for nearly half of this market. And Glu on Thursday, May 28 upped its Q2 bookings guidance, citing better-than-expected sales during the coronavirus lockdown environment.
Glu upped its Q2 bookings range to between $162.5 and $167.5 million, up from its prior $150 to $155 million guidance. “We’ve seen significant momentum in the business and broad-based growth across our live game portfolio driven by successful live operations execution and continued positive industry trends… with several setting new records for daily bookings along the way… These positive trends are driving increased scale and better than anticipated flow through to the bottom line…” CEO Nick Earl said in prepared remarks.
Looking ahead, our current Zacks estimates call for Glu’s Q2 sales to climb 64%, up from the 44% projected sales expansion prior to the update. Meanwhile, its adjusted quarterly earnings are projected to come in flat from the prior-year quarter at +$0.06 per share. And its adjusted fiscal 2020 revenue is expected to climb 88%.
Glu’s earnings revision activity has turned far more positive in the last several days and it was already a Zacks Rank #2 (Buy), with an “A” grade for Momentum. Some investors might want to take a chance on Glu stock, which is trading at roughly $10 per share, for its coronavirus expansion alongside the likes of Zoom ZM, Netflix NFLX, and others. The cheap gaming stock might also be a solid longer-term bet on the broader expansion of mobile gaming.
It is worth pointing out that Glu on Tuesday afternoon announced that it “intends to offer $100 million of its common stock in an underwritten public offering.” This sent its stock price down over 3%, with it down in after-hours trading as well.
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