Apple Inc. (AAPL) Should Generate Robust Long-Term Capital Returns, Glu Mobile Inc. (GLUU) Set to Become Profitable by Early 2018

Apple Approaching Stellar Upgrade Cycle for 2018

Apple Inc. (NASDAQ:AAPL) handed in a nice beat yesterday evening when the tech titan delivered a third fiscal quarterly print that outperformed expectations on stronger-than-anticipated revenue. As it turns out, the titan’s iPhone sales and iPad sales in particular, with iPad revenue surging 15% year-over-year thanks to a sparkling new line of products (consider the iPad Pro) carried Apple’s performance. Today, investors are excitedly sending shares up almost 6% in pre-market trading.

Top analyst Michael Walkley at Canaccord sees this momentum only escalating for Apple, considering its steadily ramping base of loyal users and a stellar iPhone cycle soon ready to spark the masses.

With enthusiastic conviction for the titan in terms of a both near-term and long-term bullish stance, the analyst reiterates a Buy rating on shares of AAPL with a $180 price target, which represents a close to 14% increase from where the stock is currently trading.

Ultimately, the print turned out to be “[…] better than investors feared given concerns of potential delays in shipping new iPhone products. iPhone ASP in the June quarter was below our expectations due to the reduction of channel inventory of roughly 3.3M iPhones almost exclusively at the high end of their product portfolio with new premium models launching soon. As a result, iPhone ASP of $606 was slightly below our/consensus estimates of $626/$621. We believe Apple continues to grow its leading market share of the premium-tier smartphone market with double digit growth of its installed base during the quarter. We believe the iPhone installed base will exceed 635M exiting C2017, and this impressive installed base should drive strong iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns. We anticipate a stronger upgrade cycle in C2018 with the 10-year anniversary iPhone 8, as our surveys indicate strong consumer interest in and anticipation for new iPhones anticipated to launch in September,” concludes Walkley.

Michael Walkley has a very good TipRanks score with a 67% success rate and a high ranking of #23 out of 4,638 analysts. Walkley earns 22.0% in his yearly returns. When recommending AAPL, Walkley gains 20.9% in average profits on the stock.

TipRanks analytics exhibit AAPL as a Strong Buy. Out of 34 analysts polled by TipRanks in the last 3 months, 26 are bullish on Apple stock while 8 remain sidelined. With a return potential of nearly 11%, the stock’s consensus target price stands at $166.03.

Glu Mobile on Its Way to Paving Path to Profitability

Glu Mobile Inc. (NASDAQ:GLUU) delivered a sturdy second-quarter print yesterday that impressed with a record second peak quarterly performance for bookings ever for the mobile game maker.

Top analyst Michael Graham at Canaccord may be sidelined on Glu’s prospects for now, but considering a quarter that saw bookings shoot up 62% year-over-year, the analyst is encouraged that this trend should keep pedaling well into the back half of the year.

For the second quarter, the mobile game maker posted $82.5 million in bookings, beating the mid-point of outlook by a hefty $10.5 million, all while lifting full year guidance by another $24.5 million. To the analyst, this indicates the strong bookings tide will flow into both the third as well as the fourth quarter. Likewise, Design Home mightily outclassed expectations bringing in $22.5 million in bookings at a rate of $247,000 per day- the best daily rate Glu has attained for any game in more than two years. Graham commends a rise in user acquisition that “seemingly paid off,” as DH turned in $7.8 million from $13.9 million in user acquisition spend.

As Glu paves the way to becoming a profitable company, the analyst surveys from a perspective of cautious optimism, maintaining a Hold rating on the stock with a price target of $3, which implies a 9% upside from where the shares last closed.

“Glu continues strong execution with faster path to EBITDA profitability,” cheers Graham, who likewise underscores, “Other growth and evergreen titles providing good foundation for 2018.” Moreover, “Existing portfolio strength and cost control pull forward profit targets,” continues the analyst.

Graham surmises, “Bookings from strong original IP, like Design Home and Covet Fashion, combined with strict opex control helped the beat flow through to EBITDA. Both 2017 bookings and EBITDA guidance were raised by more than the Q2 beat, suggesting that the same level of execution can be expected for H2. A combination of growth and evergreen title outperformance drove the quarter as Glu’s retooled structure, prototyping, and launch strategy continued to pay off. Given the results and outlook for a solid 2018 backed by live ops iteration and new partnerships, management also pulled forward its EBITDA profit target to Q1/18, from Q3/18 previously.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star analyst Michael Graham has achieved a high ranking of #119 out of 4,638 analysts. Graham has a 64% success rate and garners 13.7% in his annual returns. However, when recommending GLUU, Graham forfeits 8.3% in average profits on the stock.

TipRanks analytics demonstrate GLUU as a Buy. Based on 5 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Glu Mobile stock while 2 maintain a Hold. The 12-month average price target stands at $3.07, marking a 12% upside from where the stock is currently trading.

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts