Why This Cowen Analyst Sees 60% Upside In Shares Of Glu Mobile

• The share price of Glu Mobile, Inc. GLUU has risen by almost 20 percent, year to date.
• Cowen’s Doug Creutz has maintained an Outperform rating and price target of $8 on the company.
• The initial performance of Deer Hunter 2016 appears promising, while Kim Kardashian: Hollywood and Racing Rivals have continued their strong performance.

The company released Deer Hunter 2016 for the iOS and on Google Play on September 17. The game has already been the #1 spot for downloads on iOS devices for several days and “is now in the top 20 grossing in monetization (#19 on iPhone) in the US,” Creutz reported.

Deer Hunter 2014 had peaked at #4 in terms of monetization and had averaged in the range of #5-7 in terms of top grossing games for many months after its launch. However, Creutz believes that the monetization levels are much higher now than they were for every rank after the top two games, as compared to two years ago.

“We think DH16 is on track to do at least as well initially as DH14 did, and we think the game could well have better legs, based on the improvements Glu has made to its ability to update games and retain players,” the Cowen report said.

Glu Mobile now has three games among the top 25, including Deer Hunter, Kim Kardashian: Hollywood and Racing Rivals. Creutz believes that the company was already well on its way to generate significant upside to its revenue guidance as well as the consensus expectations for 3Q, even before the launch of DH16.

“DH16's performance only enhances the likelihood of upside and positions the company well going into what will need to be a strong Q4,” Creutz stated.