Street rates Gluu a SELL !!!
COMPUSTAT for Price and Volume, TheStreet.com Ratings, Inc. for Rating History
RECOMMENDATION
We rate GLU MOBILE INC (GLUU) a SELL. This is driven by a number of negative factors, which we believe
should have a greater impact than any strengths, and could make it more difficult for investors to achieve
positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the
most important has been generally deteriorating net income.
HIGHLIGHTS
The company, on the basis of change in net income from the same quarter one year ago, has significantly
underperformed when compared to that of the S&P 500 and the Software industry. The net income has
significantly decreased by 102.6% when compared to the same quarter one year ago, falling from -$4.95
million to -$10.02 million.
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
the Software industry and the overall market, GLU MOBILE INC's return on equity significantly trails that of
both the industry average and the S&P 500.
The gross profit margin for GLU MOBILE INC is rather high; currently it is at 69.50%. Regardless of GLUU's
high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of
the gross profit margin, GLUU's net profit margin of -66.00% significantly underperformed when compared to
the industry average.
GLUU, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same
quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue appears to have seeped
down to the company's bottom line, decreasing earnings per share.
Compared to where it was a year ago, the stock is now trading at a higher level, and has traded in line with
the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers
ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.