In research reports released Thursday, Oppenheimer analyst Sean McGowan initiated Market Perform ratings on shares of the mobile game company Glu Mobile Inc. (NASDAQ:GLUU) and social gaming company Zynga Inc (NASDAQ:ZNGA). No price targets were provided.
Glu Mobile Inc.
McGowan emphasized his neutral stance on Glu Mobile, noting, “Over the past six years, Glu has successfully transformed itself from a company entirely dependent on licensed games for feature phones to one with a broadening mix of licensed and owned intellectual properties (IPs) in multiple genres for smartphones and tablets. All of its games are free-to-play, and the rate of monetization has been steadily increasing in recent years. We believe Glu has one of the broadest portfolios of solid franchises among public mobile gaming stocks, but near-term headwinds will likely keep the shares down.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Sean McGowan has a total average return of 2.3% and a 49.2% success rate. McGowan has a -9.6% average return when recommending GLUU, and is ranked #1346 out of 3840 analysts.
Out of the 8 analysts polled by TipRanks, 6 rate Glu Mobile stock a Buy, while 2 rate the stock a Hold. With a return potential of 139%, the stock’s consensus target price stands at $7.59.
McGowan further commented on Zynga, “We believe the share price adequately discounts the company’s prospects. If investors value its non-operating assets (net cash and real estate) at fair value, there could be some upside. We believe these non-operating assets account for ~65% of the stock price. Thus, one could make the case that the stock is undervalued, but with near-term results likely to be sluggish until some recently delayed game titles are released and start to drive growth, we don’t expect the stock to outperform.”
According to TipRanks.com, analyst Sean McGowan has a 11.1% average return when recommending ZNGA.
Out of the 9 analysts polled by TipRanks in the last 3 months, 2 rate Zynga stock a Buy, 6 rate the stock a Hold and one recommends a Sell. With a return potential of 40.64%, the stock’s consensus target price stands at $3.53.