What happened

Shares of Glu Mobile (NASDAQ:GLUU) rose 41.2% in November, according to data from S&P Global Market Intelligence. The video game stock gained ground after the company posted better-than-expected quarterly results and continued to climb thanks to momentum for the broader market. 

GLUU Chart

GLUU data by YCharts

Glu published third-quarter results on Nov. 5, delivering sales and earnings for the period that topped the market's expectations. The company posted earnings per share of $0.07 on sales of $158.5 million, while the average analyst target had guided for per-share earnings of $0.01 on revenue of $127.25 million. 

A person using a mobile phone with blurred colored lights in the background.

Image source: Getty Images.

So what

Glu's Q3 sales and earnings performance came in handily better than Wall Street's targets, and the business managed to grow bookings 22% year over year, substantially above management's guidance for bookings growth of roughly 10% in the period. The outperformance was driven by strong performance for Design Home, Covet Fashion, and MLB Tap Sports Baseball

Glu also used the occasion of its Q3 release and conference call to reveal details about Table & Taste, an upcoming casual mobile game from the company's CrowdStar studio that will see players experimenting with food pairings, aesthetics, and decor in order to create different dining experiences. CrowdStar is responsible for Design Home and Covet Fashion -- Glu's most successful titles -- so the 2021 release is definitely worth keeping an eye on.

Now what

Glu Mobile stock has dipped early in December's trading. The video game company's share price is down roughly 6% in the month as of this writing. 

GLUU Chart

GLUU data by YCharts

Glu Mobile now expects full-year bookings to come in between $555.3 million and $560 million, representing 31.8% growth year over year at the midpoint of the target. For investors looking to build a position in the video game industry, the company stands out as an attractive small-cap candidate and one of my top picks in the space even after its recent gains. 

Glu has a market capitalization of roughly $1.6 billion and is valued at approximately 23.5 times this year's expected earnings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.