The 3 Most Undervalued Mobile Gaming Stocks to Buy in March 2024
The mobile gaming scene is an intriguing place to look these days, with most of the attention focused on the semiconductor industry. Indeed, the AI boom may be the real deal. But that doesn’t mean investors get a pass to ignore the price they’ll pay for entry. If Friday’s chaotic trading session showed us anything, it’s that the hottest corner of tech can be vulnerable, even though nothing has changed on the front of AI. All of these factors have led to mobile gaming stocks soaring.
Meanwhile, the video-gaming stocks held their own pretty well, falling to a lesser extent than the broad Nasdaq 100, which fell around 1.5% on the day, and certainly less than the semiconductor ETFs, some of which shed 4% of their value on Friday.
As the benefits of AI spread to other industries, like gaming, it may be worth checking in on the plays. Of the gamers, I’m most intrigued by the top dogs in mobile, a segment of gaming that looks the growthiest.
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Electronic Arts (EA)
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Electronic Arts (NASDAQ:EA) stock has been going nowhere in a hurry since peaking in early 2021. The stock may be within striking distance of new heights (down around 8% from its high), but without a timely catalyst, the consolidation could continue for yet another year.
With plans to cut 5% of its labor force (around 670 workers), the $36.1 billion gaming giant seems to be eager to find the right balance between growth and driving efficiencies as industry headwinds and high interest rate woes prevail. Though the latest cuts are discouraging for investors, don’t expect EA to lift its foot off the mobile-gaming gas as it looks to play the long game.
If EA stock is to break out of its funk, it’ll need mobile to do some real heavy lifting. In recent years, EA has been wheeling and dealing to bolster its mobile gaming arsenal, bringing on the likes of bite-sized studios Glu Mobile and Playdemic.
After such deals, EA stands out as one of the mobile leaders in North America. And as the sports division looks to tap into free-to-play mobile with its sports franchises, EA could be the mobile gaming play to bet on. At 17.7 times forward price-to-earnings (P/E), the stock looks pretty cheap.
Take-Two Interactive (TTWO)
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Take-Two Interactive (NASDAQ:TTWO) is my number-two pick for investors seeking mobile gaming exposure. Undoubtedly, mobile game powerhouse Zynga is now part of the Take-Two family. Still, I think the best has yet to come when it comes to Zygna and Take-Two’s longer-term mobile gaming ambitions.
As Zygna looks to get up and running at full speed again after slipping from pandemic peak levels, the mobile franchise could have what it takes to make Take-Two a top dog in the mobile scene. The company is shooting to be a bigger player in mobile, the firm’s “fastest-growing segment in interactive entertainment.” Furthermore, I don’t doubt its ability to rise to the occasion.
As magnificent as the mobile business is, it’s the looming release of non-mobile hit Grand Theft Auto VI that will be the talk of town as we inch closer to the expected release year of 2025.
At writing, shares of TTWO go for around 23.1 times forward P/E, quite a bit pricier than EA stock, likely due to the GTA factor. Easily, this is one of the top mobile gaming stocks.
NetEase (NTES)
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For investors looking to make a huge splash in mobile, it’s tough to look past China’s NetEase (NASDAQ:NTES), which has also been under some pressure following the pandemic stay-at-home boom days. At 16.8 times trailing P/E, NTES stands out as one of the best value plays in mobile gaming.
That said, there are considerable risks to investing in China. Given such risks, I’m not so sure if the relative discount on shares is enough to warrant jumping into the name over the likes of an EA or TTWO. After coming up (slightly) short on revenues in its latest quarter, the firm seems to be feeling all the same pressures as most other gaming plays.
In any case, I view mobile as one of the better places to be amid ongoing industry challenges. NetEase is home to some of the most ambitious titles in mobile. And as a mobile-heavy company, investors seeking mobile exposure may prefer the name over the likes of its North American rivals. If you are looking for the top mobile gaming stocks, start with this one.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.
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