KeyBanc Bullish On Glu Mobile, Raises Estimates For Mobile Game Maker

Glu Mobile Inc. GLUU updated its recent guidance to reflect positive trends in engagement and monetization that have continued since early May.

This reaffirms confidence in the company’s position in the growing mobile games industry, according to KeyBanc Capital Markets.

The Glu Mobile Analyst

Tyler Parker maintained an Overweight rating on Glu Mobile with a $10 price target. 

The Glu Mobile Thesis

Glu Mobile has witnessed broad-based strength across its live services portfolio, with record quarters expected from Design Home and Covet Fashion as well as positive trends in other games, Parker said in a Thursday note. (See his track record here.)

Glu Mobile raised the bookings guidance for the current quarter from between $150 million and $155 million to between $162.5 million and $167.5 million.

For the full year, the guidance was raised from between $490 million and $500 million to between $502.5 million to $512.5 million.

The full-year guidance has been raised only to reflect the higher projections for the second quarter, the analyst said.
While the company may witness a return to more normalized levels of engagement and monetization as stay-at-home restrictions ease, there seems to be upside to the implied expectations for the second half of the year, he said. 

Parker raised KeyBanc's adjusted EBITDA estimates for fiscal 2020 and 2021 from $53.9 million to $63.2 million and from $79.2 million to $84.2 million, respectively.

GLUU Price Action

Shares of Glu Mobile were trading 11.46% higher to $9.68 at the time of publication Friday. 

Photo by Glu Mobile via Wikimedia.