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Glu Mobile Q3 Earnings: Can NasdaqGS:GLUU Hit Its $0.07 EPS Target?

in EARNINGS/INVESTING IDEAS by

Glu Mobile Inc. (NasdaqGS:GLUU) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.07/share on revenue of $137.2 million. The consensus earnings per share (EPS) of $0.07/share is based on a poll of 10 analysts and represents a growth in eps of 7.9% over the same quarter last year, when the company reported earnings of $0.07/share.

The revenue forecast of $137.2 million based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 14.0%. Last year the company reported $120.4 million in revenue for the quarter.

Expected to report EPS growth of 7.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $137.24 $120.40 14.0%
EPS $0.07 $0.07 7.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and met expectations 2 quarters.

What are your expectations from Glu Mobile Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.08 $0.19 127.1% Beat
Q1, 2020 $0 $0 0% Met
Q4, 2019 $0.08 $0.09 16.1% Beat
Q3, 2019 $0.03 $0.07 112.9% Beat
Q2, 2019 $0.05 $0.06 20.0% Beat
Q1, 2019 $0.05 $0.06 23.7% Beat
Q4, 2018 $0.07 $0.09 27.5% Beat
Q3, 2018 $0.07 $0.07 0% Met

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −15.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $9.80 $8.28 −15.5% Decline
May 7, 2020 $8.73 $10.25 17.3% Increase
February 5, 2020 $6.25 $8.10 29.7% Increase
November 6, 2019 $5.94 $5.47 −7.9% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.35, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.35 implies a 0.9% chance of earnings manipulation.

Fundamentals And Technical Analysis

Glu Mobile Inc. is currently trading at $7.16/share, down −2.6% for the day. The company is trading at approximately 66.0% of its 52-week high of $10.85/share. The company’s stock price is down −13.5% since the last earnings report and down −9.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 37.52 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:GLUU Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −109.83 and a forward P/E multiple of 20.27.

Glu Mobile Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.35. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $7.16
P/E Ratio −109.8x
P/E Ratio (Fwd) 20.3x
PEG Ratio 0.1
Total Debt / Total Capital 3.2%
Levered Free Cash Flow $16.396 million
EV / EBITDA −84.5x

Finbox

Glu Mobile Inc. is a small-cap stock with a market capitalization of $1.223 billion and a total enterprise value of $981.6 million. The company operates in the Communication Services sector and the Entertainment industry.

Glu Mobile Inc. develops, publishes, and markets a portfolio of free-to-play mobile games for the users of smartphones and tablet devices. It publishes titles primarily in four genres, including lifestyle, casual, mid-core, and sports and outdoors. The company’s portfolio of compelling games based on its own intellectual property, such as Cooking Dash, Covet Fashion, Deer Hunter, Design Home, Diner DASH Adventures, and QuizUp, as well as games based on or significantly incorporating third party licensed brands, including Kim Kardashian: Hollywood, MLB Tap Sports Baseball, and Restaurant Dash with Gordon Ramsay, as well as Disney Sorcerer’s Arena. It markets, sells, and distributes its games primarily through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, and others. The company was formerly known as Sorrent, Inc. and changed its name to Glu Mobile Inc. in May 2005. Glu Mobile Inc. was founded in 2001 and is headquartered in San Francisco, California.

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