Canaccord analyst Michael Graham notes that once again, Glu Mobile’s (NASDAQ:GLUU) second-quarter results have outclassed his expectations, thanks to a powerhouse opener from Tap Sports Baseball 2016 along with other catalog games Cooking Dash 2016, Kim Kardashian: Hollywood, and Racing Rivals. However, despite strong earnings, another lowering in full year guidance has left Graham remaining Neutral and reiterating a price target of $3.00.

After a continued problem encountering a need to lower yearly guidance, Glu is attempting to rebound by making “evergreen” titles its new chief priority, causing other 2016 games a delay until 2017. Even Glu’s shoot title collaboration with Tencent, Rival Fire, is finding itself on the back-end of slowed growth in profits.

Yet, Graham explains, “While the 2016 slate will shrink, we are encouraged by what seems like prudent investing around some of the best game engines and titles that can have long shelf lives and exceed the company’s fixed costs. We also think Glu could be an interesting acquisition candidate, possibly for partner Tencent, which recently purchased Supercell. We remain optimistically on the sidelines looking for signs of predictable growth.”

While Graham remains positive on bookings and EBITDA, as they not only outperformed the Street’s estimates, but also reached the high ends of guidance, Graham finds significantly weak third-quarter revenue guidance ultimately disappointing. Until the gaming company can test whether reprioritized focus on existing titles can once again bring in sufficient gains, the analyst remains cautious on GLUU.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, Michael Graham is a top five-star analyst, ranked #95 out of 4,085 analysts. Graham upholds a 57% success rate and earns 12.5% in his annual returns. However, when recommending GLUU, Graham loses an average of 8.4% in profits.

TipRanks analytics exhibit GLUU as a Hold. As of this writing, all 3 analysts polled in the last 3 months maintain a Hold. The consensus price target stands at $2.17, marking a 2% downside from current prices.

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