Glu Mobile Inc. (NASDAQ:GLUU) intends to release its quarterly results this week. GluU shares are currently trading 30 percent below 52-week highs, and perhaps the most profitable period to enter is the time ahead of the release.
Glu Mobile owns many brands of popular mobile games and applications’ and is one of the winners of the rising demand for mobile gaming. The gaming industry is booming, and the stay at home measure forced by the COVID-19 pandemic has contributed to an even higher demand for mobile entertainment. Research by Global Data predicts that annual sales will hit $300 billion in the global gaming industry in 2025, up from $131 billion in 2018.
Apps around the Covet Fashion, Design Home, TAP Sports Baseball and Kim Kardashian: Hollywood are among the most well-known and long-term ventures of the company. It was these applications which helped Glu Mobile downloads rise to $182 million by 79% in the second quarter. In March this year, the company added another game- Disney Sorcerer’s Arena, which also became popular but it is earlier to say anything about whether that brand will become a long-term game.
Glu Mobile is significantly diversifying its activities and recently launched an online store in support of its Design Home placement application. Users can now purchase objects and furniture used in the game. A significant driver of growth may be the opportunity to incorporate e-commerce into its games. The Covet Fashion app and several other innovations in the business have the ability to integrate with e-commerce.
Glu Mobile ended the June quarter with around $283 million in cash with zero debt. According to the company’s own estimates, the amount of downloads of Glu Mobile applications will rise by 10 percent in the third quarter, which is a major slowdown from the second quarter pace. This opens up great opportunities for acquisitions and portfolio expansion. However, the company plans to increase app downloads to 28% by the end of the year.