Please ensure Javascript is enabled for purposes of website accessibility

What Made Glu Mobile Stock Spike Higher Today

By Jon Quast - May 29, 2020 at 11:31AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Forget about the company raising guidance last quarter. It's raising guidance even higher now.

What happened

Shares of mobile-gaming company Glu Mobile (GLUU) spiked higher on Friday, after the company provided an unscheduled upbeat update for its current quarterly results. As of 11 a.m. EDT, the stock was trading 10% higher.  

Today's movement for Glu Mobile stock continues an upward trend for 2020. Shares are up around 60% so far in 2020, handily outpacing the market.

GLUU Chart

GLUU data by YCharts

So what

Preliminary results for the second quarter of 2020 show Glu Mobile's bookings (a slightly more forward looking metric than revenue) increased to a range of $162.5 million to $167.5 million. That would be 62% growth at the midpoint from the second quarter of 2019. The company also spent less to acquire new customers, which means Q2 should be more profitable.

The update especially excited investors, considering Glu Mobile didn't set expectations this high in the first quarter. In Q1, it reported quarterly net bookings growth of 15%, coming in at $106.5 million. But the company noted favorable trends were helping its business, as consumers sheltered at home. With the wind at its back, it guided for Q2 net bookings in the range of $150 million to $155 million. 

Today's preliminary Q2 update from Glu Mobile raises expectations 12% from the low point of the previous guidance to the high point of current guidance. So Wall Street's positive reaction does appear to be proportionate to the news.

A businessman rides a rocket expelling cash money exhaust over a multi-color bar chart.

Image source: Getty Images.

Now what

In Q1, Glu Mobile raised its full-year 2020 net bookings guidance from a range of $423 million to $433 million to a range of $490 million to $500 million. Now the company is raising its guidance again. Net bookings are now expected to range from $502.5 million to $512.5 million.

Glu Mobile's pristine balance sheet and growing popularity could provide further upside for this video game stock going forward.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Glu Mobile Stock Quote
Glu Mobile
GLUU

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
323%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.