Glu Mobile Inc May Be Set Up To Beat Guidance

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Glu Mobile Inc. (NASDAQ:GLUU) looks to be progressing quite well, demonstrating growth in its most important games, according to analysts at Canaccord Genuity. Their checks suggest Glu Mobile has shown meaningful improvement sequentially, including continued strong performance from its blockbuster Kim Kardashian game.

Glu Mobile still going strong

As of now, we’re about two-thirds of the way through Glu Mobile’s fourth fiscal quarter. In their report dated Dec. 14, 2014, analysts Michael Graham, Maria Ripps and Austin Moldow report that their proprietary Glu index suggests Glu Mobile has improved sequentially so far in the current quarter. They estimate about 15% growth compared to the previous quarter.

The analysts said Glu’s top three revenue-generating titles have continued to show improved performance.

Glu’s Kim Kardashian still performing well

One concern many analysts have expressed is that the Kim Kardashian game may have run its course and be declining in popularity. However, the Canaccord Genuity team reports that the game shows “very little signs of deceleration.”

In fact, they said the game is even showing improvements in ranking in some international markets through the first week of this month. The analysts examined the game’s performance across the top 16 regions and say they’re “encouraged” by how stable the game still is.

Other titles also performing well

The analysts also report continuing solid trends in Glu’s other two top titles, Deer Hunter 2014 and Racing Rivals. They say both of the games have continued to improve their ranking cumulatively across the major mobile platforms.

Additionally, the Canaccord Genuity team reports that the recently launched Contract Killer: Sniper game has been ranking among the top 100 games on iOS and Android in the U.S.

Glu Mobile’s guidance may be conservative

Glu Mobile management guided for a 25% sequential decline in bookings for the fourth quarter, and shares of the game maker’s stock have slumped 15% since it released its last earnings report. The Canaccord Genuity analysts believe there may be upside to the company’s bookings guidance and that the price pullback may present an attractive entry opportunity for investors.

They noted that management’s guidance implies about $24 million in fourth quarter bookings for Kim Kardashian, which would be about a 45% sequential decline from the $43.4 million bookings generated in the third quarter. They think this number could be conservative.

They also point out that insiders at Glu Mobile have been purchasing more shares of the company.

Canaccord Genuity has a Buy rating and $6 per share price target on Glu Mobile Inc. The company’s shares were flat with their opening price as of this writing.

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