The coronavirus pandemic has not been kind to most companies and many of the stocks in the market are still recovering from their slumps. One of the notable gainers from among so many stocks was that of Glu Mobile Inc. (NASDAQ:GLUU), which managed to record gains of as much as 53.2% during the first six months of the year.
The growth in the stock came about from the company’s solid performances in the first two fiscal quarters of the years. Considering the fact that GLU managed to deliver such gains under such difficult circumstances, it would be remiss if investors did not take a closer look at the company.
The company is engaged in creating games for mobile phones and the coronavirus pandemic actually worked in favor of the company. The fact that hundreds of thousands of people stayed at home meant that player engagement got boosted significantly and that eventually led to a better financial performance from GLU. The company released its fourth fiscal results back in February and the first fiscal quarter results in May.
Following each announcement, the GLU stock gained significant momentum as investors piled on to it. In this regard, it is necessary to point out that video game companies have generally seen their stocks perform well. These stocks have been largely resilient against the volatility in the markets.
However, in the case of GLU, the situation is different. The GLU stock actually managed to outperform many of its peers like gaming industry titans like Take-Two Interactive, Activision Blizzard and Electronic Arts. In the fourth fiscal quarter, the company managed to beat analysts’ estimates for sales as well as earnings and that resulted in a significant rally in the stock. Sales rocketed by as much as 18% year on year to hit $112.9 million and the earning per share rose to $0.07. Analysts had estimated sales of $103.6 million.
The same thing happened when the company released its financial results for the fiscal first quarter. Sales for the period came in at $107.3 million, which proved to be higher than the average analysts’ estimates of $105.5 million. The coronavirus pandemic clearly had a hand in the unprecedented growth in the company’s financial performance and on top of that GLU managed to actually beat its peers, which proved to be another major positive
While the performance in the first six months was impressive, it should be noted that the stock continued to gain in July, and in the first week of the month, it had gained as much as 6%. Glu Mobile is still currently only a penny stock in the ever-growing video game space and has a market cap of only $1.6 billion. The stock is trading at only 30 times this year’s revenues and hence, it could be said that it is valued quite cheaply.
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