Glu Mobile Worth $3, Says Northland's Jeff Houston
Glu Mobile shares continued its rally on Thursday after it announced late Wednesday the signing of a multi-year deal with Taylor Swift to develop a new mobile game on the pop star.
Shares of Glu Mobile, which earlier developed games on Kim Kardashian and Katy Perry, have surged as much as 30 percent on the news, and it acted as a cushion after mobile game maker adjusted its 2016 expectations due to Katy Perry and James Bond difficulties. The company reported a fourth-quarter loss that however came in above Street view.
Glu had reaped dividends with its strategy of signing up celebrities with large social followings and its contracted celebrities have more than 1.3 billion social followers, up from 1 billion in third quarter. Taylor Swift is the most followed woman in the world with over 227 million social followers, and a series of Kardashian-branded apps, such as “Kimoji,” released in December.
The company had signed up with Gordon Ramsay who is followed by at least 5 million on Facebook, and 2.8 million on Twitter. Meanwhile, the games on Kendall/Kylie Jenner beta are performing well in Canada. Despite the subpar Dec. 17th Katy-Perry performance, which could improve, multiple celebrity apps will be launched in the coming months.
Jeff Houston, an analyst with Northland Capital Markets, said: “Given the hits-driven lumpiness of Glu’s business, its fortunes could turn positive if one of these releases takes hold.”
Houston has a price target of $3 and an outperform rating on Glu shares, which are currently trading at $2.59 and were trading in the range of $1.98 to $7.03 during the past 52-weeks.
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