As a sign of confidence in Glu Mobile Inc. (NASDAQ:GLUU), Roth Capital analyst Darren Aftahi is upgrading the stock from Neutral to Buy, while raising the price target to $3.25 (from $2.00). The mobile game maker is scheduled to report its fourth-quarter earnings after the bell on Wednesday, and Aftahi’s proprietary analysis suggests bookings upside.
Aftahi wrote, “Our proprietary analysis gives us greater confidence that GLUU’s FY17 bookings run rate is starting 1Q at an annualized rate over $200M+. As such, we raise our FY17 bookings estimate from $184M to $200.3M. We believe stabilization of its core games portfolio coupled with the layering of new games in FY17, in addition to de-emphasis on celebrity, should put GLUU back on trajectory for growth. So as we take an initial measured approach to FY17 bookings, we believe consensus figures remain very reasonable. As such, on higher FY17 bookings of $200.3M and higher applied EV/’17E sales multiple (1.9x vs. 1.1x prior), we arrive at our revised PT of $3.25, up from $2.00 prior. Our PT takes into account projected cash balance of ~$53M at FY17 year-end.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Darren Aftahi has a yearly average return of -4.4% and a 43% success rate. Aftahi has a 1.9% average return when recommending GLUU, and is ranked #4023 out of 4374 analysts.
Out of the four analysts polled by TipRanks (in the past 3 months), one rates Glu Mobile stock a Buy, while three rate the stock a Hold. With a return potential of nearly 2%, the stock’s consensus target price stands at $2.48.