Benchmark Cuts Price Target on Glu Mobile (GLUU) After Spending Time with Management

Benchmark reiterated a Buy rating on Glu Mobile (NASDAQ: GLUU), and cut the price target to $6.58 (from $7.64), after spending time with the Glu mobile finance team. The continual flow of newly licensed celebrities should provide a forward awareness catalyst as related games are launched, although the generic relationship between a star’s social media followers and related mobile games success remains unproven.

Analyst Mike Hickey commented, "We spent a day in Denver with a member of the Glu mobile finance team. The Company’s shares price has returned 21% YTD, although over the trailing 3-months has contracted 27%. In our view, the Company’s valuation has primarily suffered from product execution issues, a related adjusted EBITDA guidance reduction and insider sales; all of which appeared shortly after a bullish Analyst Day and Tencent investment. The recent valuation contraction in-front of several potential product catalysts has amplified speculative return potential, although we struggle over lingering implications from product execution issues and have on-going concerns on whether they can continue to effectively mine the celebrity genre without cannibalization and / or market saturation."

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 $4.72 yesterday.

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