UPDATE: Glu Mobile (GLUU) May Have Found Bottom, Says Analyst; Benchmark Upgrades Stock to 'Buy'

(Updated - February 5, 2016 8:05 AM EST)

Benchmark upgraded Glu Mobile (NASDAQ: GLUU) from Hold to Buy with a price target of $3.68, suggesting upside of 38%. Yesterday the company announced Q4 results and a partnership with Taylor Swift.

Analyst Mike Hickey said he sees more balanced risk/reward, and he thinks shares have "likely found a bottomed."

"We view the Company’s risk / reward valuation profile balancing positive; benefiting from a reasonably strong track record for creating and sustaining hit games, mobile game market growth, planned release of 5 celebrity games, strong balance sheet, an on-going valuation reset, recently announced share repurchase plan and compelling strategic partnerships with Hollywood, Celebrities and Tencent; offset by elevated execution risk from underperforming recent game releases now somewhat realized and a meaningful negative reset to our performance growth expectation," said Hickey.

The analyst added, "We suspect the Company’s valuation has likely found a bottom, after a meaningful financial reduction in fiscal 2H’15, a generic correction in equity valuations from macro considerations and an assumed general disdain from investors on the mobile industry combinated to push the Company’s valuation down 71% from its 52 week high. As we look forward, we reset with some enthusiasm on the Company’s game pipeline including the Kylie and Kendall Jenner game, which has an anticipated fiscal Q1’16 launch."

For an analyst ratings summary and ratings history on Glu Mobile click here. For more ratings news on Glu Mobile click here.

Shares of Glu Mobile closed at $2.67 yesterday.

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