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.