It has been a really tough time for GLUU stock investors as shares of Glu Mobile Inc. (NASDAQ:GLUU) are down over 60% since reporting its first quarterly results in early May.
Earnings were a Key Setback
As everyone knows, the mobile gaming industry has grown at a breakneck pace over the past half a decade or so. However, the fortunes of a gaming company ultimately depend on the latest games that it produces and hence, financial results can often swing from one quarter to the next. That is what has been happening with Glu Mobile, and the pattern was revisited earlier this month in the company’s Q2 2019 financial results.
After having posted solid growth in the previous quarter, Glu delivered disappointing results in the latest quarter, and that triggered a significant selloff for GLUU stock. Hence, it is perhaps time to take a closer look at Glu’s operations.
In this regard, a look at the booking numbers could be an excellent indicator of Glu Mobile’s current fortunes. Bookings represent the money that the company’s customers have already committed, and the latest projections have been cut by Glu. The company has projected that the bookings for the full year are going to be between $406 million and $410 million.
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This morning, GLUU stock made a new 52-week low of $4.20.
However, this reflects a large cut from the previous projection of full-year bookings between $445 million and $455 million. Considering the fact that Glu has released new games recently, the lower booking projections are not going to sit well with its investors.
Although it is true that investors might feel that the company’s new titles are unable to bring in sufficient cash, Glu Mobile has assured that 2020 is going to be a much better year. It will launch a fresh Deer Hunter game, while several Disney-based titles are also on the pipeline. That being said, if those games fail to make the right impression, then it could land the company in great trouble. However, the current booking projections are not as bad as they could be, considering that the company generated only $385 million in bookings in 2018.
Moreover, the fact that the company trades at only 11 times its future earnings also makes GLUU stock a relatively cheap option and one that could be considered at these lower levels.
What do you think?
Featured image: DepositPhotos © tomert
