Shares of Glu Mobile (NASDAQ:GLUU) fell 27.1% in May, according to data from S&P Global Market Intelligence. The video game company's stock saw a steep decline following the business' first-quarter results, and it continued to trend lower as the month went on amid sell-offs for the broader market.
Glu reported first-quarter earnings on May 6, delivering mixed results and guidance that left investors underwhelmed. The company broke even on $95.9 million in sales (up 18% versus the prior-year quarter), and breezed past the average analyst estimate for revenue of $89.75 million. Bookings for Q1 came in better than anticipated as well -- rising roughly 7% year over year to reach $92.6 million. However, the average analyst estimate had called for a per-share profit of $0.05, and bookings guidance for the second quarter also fell short of expectations.
For the second quarter, the company expects to post bookings between $100 million and $102 million -- short of the analyst call for bookings of $107 million that was in place before the recent earnings release. The earnings miss in the first quarter, combined with a miss on guidance and sell-offs for the broader market, was enough to send the company's valuation tumbling last month -- even as it raised its full-year bookings guidance to between $445 million and $455 million and topped the average analyst target for annual sales of $446 million. June has yet to bring much in the way of relief for shareholders.
Glu Mobile stock has continued to lose ground this month, with shares trading down roughly 9% across the stretch.
Following the mixed quarterly results and guidance, one of Glu's biggest shareholders took some profits on the stock. Tencent unloaded a quarter of its Glu stock on the open market on May 31, selling 7.26 million shares of its stake for a haul of roughly $56 million. Tencent still owns a roughly 14.5% stake in Glu, but the sale does look a bit more conspicuous on the heels of the smaller game company's weaker-than-expected quarterly earnings. Some investors seem to have followed Tencent's move after the sale was disclosed in a Securities and Exchange Commission filing on June 4.
Glu shares trade at roughly 20.5 times this year's expected earnings.