KeyBanc started coverage of two mobile video game publishers with bullish ratings, saying mobile gaming is an attractive market and Glu Mobile Inc. (NASDAQ: GLUU) and Zynga Inc. (NASDAQ: ZNGA) are among the companies best poised to benefit.
KeyBanc's Tyler Parker started coverage of Glu Mobile with an Overweight rating and $8 price target.
Parker resumed coverage of Zynga with an Overweight rating and price target of $8.50.
Mobile is the largest and fastest growing segment of the gaming industry, Parker said in a note. It continues to grow in terms of the percentage of time people spend on their phones, and as technology evolves and connectivity both broadens and speeds up as 5G comes into play, higher quality gaming will be possible, he said.
The changing technology is allowing "deeper and more quality games," that are not only better for players, but are being monetized more effectively by companies.
KeyBanc favors mobile-first publishers with scaled and growing portfolios that put emphasis on driving growth through live services.
"We believe the mobile gaming market is attractive given the strong growth expected over the next few years, which should benefit scale mobile-first publishers," Parker wrote in a note.
Parker looks forward to Glu Mobile's release this year of "Diner DASH," and an expected profitability ramp.
On Zynga, "proven brands and a deep pipeline," are the draw, along with expanding margins and possible merger and acquisition opportunities.
Glu's stock was up 3.2% at $6.06, while Zynga was up 1.18% to $6.85.
Glu Mobile Stock Plunges, Wedbush Lowers Price Target After Q2 Print
Latest Ratings for GLUU
|Jan 2020||Initiates Coverage On||Overweight|
|Jan 2020||Initiates Coverage On||Buy|
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