Glu Mobile (GLUU) PT Lifted to $9.50 at Northland Amid Tencent and Britney Spears Deals
Northland Capital Markets analyst Darren Aftahi reiterated an Outperform rating and boosted his price target on Glu Mobile (NASDAQ: GLUU) to $9.50 (from $7.50) following Q1 results, the Britney Spears game and a deal with Tencent.
Aftahi commented, "We were looking for three things from Glu: Outperformance in 1Q, in-line 2Q guide and a 50/50 potential for a new celebrity announcement. Glu delivered on all three, including signing Britney Spears to an 8-year exclusive deal (with a hint of more to come). However, the real news was its strategic partnership and $126M investment from Asian Internet and gaming conglomerate, Tencent. Tencent opens up many strategic avenues for Glu, but most importantly, we believe, is its massive user platform, which should enable Glu to significantly scale its revenue potential, long term, in APAC. Tencent’s investment, which came at a premium ($6/share) to the current price, should put a floor in shares, but more importantly gives the story in 2016 and beyond potential upside, in a significant way. We reiterate our Outperform rating; price target moves from $7.50 to $9.50."
The firm trimmed Q2 EPS from $0.25 to $0.20.
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Shares of Glu Mobile closed at $5.40 yesterday.