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Glu Mobile (GLUU) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Glu Mobile (GLUU) closed the most recent trading day at $7.29, moving -1.88% from the previous trading session. This change lagged the S&P 500's 0.53% loss on the day. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 1%.

Heading into today, shares of the mobile game maker had gained 7.22% over the past month, outpacing the Consumer Discretionary sector's gain of 1.09% and the S&P 500's gain of 2.68% in that time.

Wall Street will be looking for positivity from GLUU as it approaches its next earnings report date. This is expected to be August 1, 2019. Meanwhile, our latest consensus estimate is calling for revenue of $101.59 million, up 2.2% from the prior-year quarter.

GLUU's full-year Zacks Consensus Estimates are calling for earnings of $0.34 per share and revenue of $447.16 million. These results would represent year-over-year changes of +240% and +16.26%, respectively.

It is also important to note the recent changes to analyst estimates for GLUU. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.26% lower. GLUU currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, GLUU is holding a Forward P/E ratio of 21.6. This valuation marks a premium compared to its industry's average Forward P/E of 21.51.

Investors should also note that GLUU has a PEG ratio of 1.44 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Toys - Games - Hobbies stocks are, on average, holding a PEG ratio of 2.12 based on yesterday's closing prices.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 19, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GLUU in the coming trading sessions, be sure to utilize Zacks.com.


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