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Glu Mobile Inc. Just Recorded A 517% EPS Beat: Here's What Analysts Are Forecasting Next

Simply Wall St
·4 min read

A week ago, Glu Mobile Inc. (NASDAQ:GLUU) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 7.3% to hit US$147m. Glu Mobile also reported a statutory profit of US$0.07, which was an impressive 517% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Glu Mobile

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earnings-and-revenue-growth

After the latest results, the eight analysts covering Glu Mobile are now predicting revenues of US$581.7m in 2021. If met, this would reflect a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 596% to US$0.33. Before this earnings report, the analysts had been forecasting revenues of US$581.0m and earnings per share (EPS) of US$0.22 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.

The consensus price target was unchanged at US$11.31, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Glu Mobile analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$9.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Glu Mobile's revenue growth is expected to slow, with forecast 14% increase next year well below the historical 17%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 15% next year. Factoring in the forecast slowdown in growth, it looks like Glu Mobile is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Glu Mobile following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Glu Mobile analysts - going out to 2022, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Glu Mobile that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.