IB Net Payout Yields Model

Glu Mobile: Beast Mode

Anybody following here knows that Glu Mobile (GLUU) has long been a strong buy. The mobile-game developer struggled with consistency until the CEO was replaced a few years back. The stock is now hitting all-time highs with a breakout above $8.

By simple valuation multiples, Glu Mobile still trades at a cheap multiple despite the 100% gain in the above period. The stock still trades at half the forward EV/S multiple of Activision (ATVI) and Electronic Arts (EA).

For this reason, Glu Mobile easily rallies to $10 at this point. Not sure the stock completely covers the multiple gap with the industry leaders, but no logic exists for the faster growing Glu Mobile to trade at a substantially lower multiple.

This doesn't even factor in the fact that the small company has the greater potential for a big hit such as the upcoming WWE Universe. Glu Mobile has the potential for upside growth that isn't factored into the price.

The goal here is to review the stock again when the price hits $10.

Disclosure: Long GLUU. Please review the disclaimer page for more details. 


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