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Glu Mobile: Recovery Is On Its Way

Mar. 07, 2018 4:46 PM ETGlu Mobile Inc. (GLUU)DIS24 Comments
Aleksey Razdolgin profile picture
Aleksey Razdolgin


  • Throughout 2017, Glu Mobile’s stock has increased in value by more than 80%, while its revenue was also up by more than 40% Y/Y.
  • The company has a strong lineup of products for 2018 that have every chance to create shareholder value in the upcoming quarters.
  • Right now, Glu Mobile’s stock has all the chances to recover and surpass its 52-week high level, if the management will continue to impose strict financial discipline.
  • I'm long Glu Mobile.

Since beginning of the year, Glu Mobile (NASDAQ:NASDAQ:GLUU) has received a number of buy and hold analysts’ recommendations from the different advisory firms, which align with my own believing that the company is undervalued at the current market price and has a great potential to create shareholder value and outperform its previous results in 2018. In the upcoming months, Glu Mobile plans to release a variety of popular gaming titles that are expected to receive a warm welcome from the public and are going to be the main drivers of growth for the current fiscal year.

After the appointment on the new management in late 2016, Glu Mobile started to slowly improve its business performance, which resulted in the growth of its major financial metrics. Nick Earl, who became the new CEO, redefined the strategy of his predecessor and slightly reorganized the company’s gaming portfolio. One of his goals was to focus more on the company’s core businesses and improve its gaming portfolio, which he managed to do, as the recent earnings report for the FY17 showed that the bookings were up 50% Y/Y, while the revenues in all four quarters combined were also up by more than 40% in comparison with the same periods last year.

In addition, investors saw that their stock is also growing at an accelerated pace, as throughout all of 2017, Glu Mobile shares have increased by more than 80% in value and were trading around 52-week high in mid-December. If we look at the recent company filings, we will see that Q3 and Q4 were record quarters, as all of the major titles were constantly improving their performance thanks to the exponential growth of their bookings. Also, if we look closely at the current gaming portfolio, we will see that the titles from the Growth category are now being the dominant

This article was written by

Aleksey Razdolgin profile picture
Aleksey is CEO of the proprietary trading company Arbitrage Trades. Aleksey is in charge of creating new opportunities in this rapidly growing investments field. He is personally investing his own money into stocks, cryptocurrencies and other emerging trends of the financial industry.

Analyst’s Disclosure: I am/we are long GLUU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (24)

Aleksey - how long are you GLUU? I mean, is there a price target you have for selling? Not even necessarily asking for the number, but just wondering if you have one in mind.
User 201 talks sense.
While I don't have to explain why I'm here, I was a Glu investor for several years during the Kim phase, the Tencent phase, and the Crowdstar phase. Sold after it passed $4.

I think the company has potential, but is still driven by their ability to put forth hits. Recently their only hits have been Crowdstar releases. While there is potential in the stock, anyone holding it now is betting that WWE will do well (not a slam dunk by any stretch) and the next TSB does well again (not a 100% certainty).

So I wish you luck, but don't feel comfortable placing my money in the stock right now when you have better candidates in other stock issues at the moment.
Plextor2 profile picture
No u don't thanks for clarifying it
Single Best Trade profile picture
User 201806 - this account was obviously created for the sole purpose to bash GLUU. You must have lost alot of $ shorting GLUU this year.
Actually I don't short stocks. I'm pretty much a long-only kind of guy.

I like to spend my money on better candidates like Alteryx and Overstock.

I hope you're not 100% in Glu like Plextor is. Lol.

Good luck.
Plextor2 profile picture
Then if you don't have GLUU why r u here ...just to amuse yourself ?
Plextor2 profile picture
All the good talk or trash ..keep it going to 5
...or $3.
Plextor2 profile picture
If so sure short it
If so sure, then put all your money on it. Lol.
I'm just holding this "stuff" with a basis just under 3 until the next spike over 5, then I am getting out. I don't know which will be more beneficial, the cash or the time saved not reading these articles anymore. Mobile gaming is just not a great business for investing. Maybe for trading. The market is fickle.
WWE looks to be limping out of the gates, and currently they only have 2 GLUU games in the top 200 grossing (not counting Crowdstar) - the evergreen does not seem to be doing that well.

The pump is currently on and the stock price is doing relatively well, but Q1 and Q2 may look pretty bad, unless something CHANGES. Buyer beware.
Whilst I hear the cautionary words and appreciate it, I also continue to holds a small position in my small portfolio. My reason is purely due to my confidence in the new management especially the CEO. It is my belief that they indeed will do well in 2018. I also believe that WWE game will do very well.
Jonathan Jordan profile picture
A small position is sensible.

RE: WWE Universe, the issue is there are a lot of successful WWE mobile games already in the market. That's good news as it demonstrates demand, but I can't see how this game is going to drive a lot of of profit as Glu will have to perform competitive UA marketing against all the other WWE games already in the market.
Cautiously optimistic is right.

Investors new to Glu Mobile should be cautious about how much money they bet on this stock.

Good luck.
Jonathan Jordan profile picture
"the management will need to make sure that every product that they launch is of high quality and has a potential to add new users on a recurring basis...."

This is biggest uncertainty for any company operating in the mobile game space. They can ensure to the best of their ability their products are high quality but they have very little ability aside of marketing to add new users on a profitable scale - c.f. The Swift Life flop - and this is Glu's ongoing problem in 2018.

Design Home is projecting flat revenues, EBITDA will be up because celebrity royalties have finally been paid off, but there's little certainty that new games - WWE, Titan World, Dash Town etc - will generate decent revenues let alone be profitable.

Indeed, it's interesting that at the end of 2017 you sold EA and you've bought GLUU. I'd be interested to hear more about why and how you think that switch is going to play out in during 2018!
GLUU is a pump and dump truck
Kaleb Kizmet profile picture
GLUU = bullish.
GLUU is one of the outstandingly BAD companies in corporate America. So many times this company has clutched defeat from the jaws of victory. Any success they have (especially due to the nature of their business) will be short-lived. Hit games are hard to come by and their success usually does not last that long. You may be right about the short term but even a quick glance at the lifetime chart of this company will clue you in that at glu mobile success is short-lived. Be very careful with this "gem".
Great Article! I believe you are very much on point! I also believe GLUU is very undervalued! One of my favorite plays of 2018!
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