Glu Mobile (NASDAQ:GLUU) looked like a top small-cap stock pick at the beginning of 2020. The mobile gaming specialist was on track to take advantage of growing interest in mobile games thanks to a strong pipeline of titles.

A year down the line, it is safe to say that Glu Mobile hasn't disappointed. Its top line has moved north, and so has the stock price. Glu shares have beaten the broader market handsomely over the past year as the novel coronavirus pandemic has led to a spike in mobile gaming.

But if you've missed the Glu Mobile gravy train over the past year, don't be disappointed -- this mobile gaming company with a market capitalization of $1.55 billion could deliver above-average returns once again in 2021. Let's see why.

GLUU Chart

GLUU data by YCharts

Glu Mobile is anticipating a solid 2021

Glu Mobile has reported results for the first three quarters of 2020 so far. Over the first nine months of the year, the company's revenue has spiked just over 33% compared to the year-ago period to $399 million. However, the company's bookings have grown at a faster pace of 38% to $435.8 million over the first nine months of the year -- which bodes well for Glu, as this metric is an indicator of future revenue.

Higher bookings mean that either Glu Mobile is attracting more users, or its existing users are spending more money on its games. The amount of money these users commit to spending on in-game items within Glu's titles (either in the form of subscriptions or one-time purchases) translates into bookings, which are recognized as revenue once the actual spending happens.

So the faster pace of growth in Glu's bookings figure bodes well for the company. The good news is that the company expects its bookings growth momentum to continue in 2021. Glu management pointed out over the last earnings conference call that it could generate bookings between $595 million and $605 million this year, which would be a high single-digit increase at the midpoint when compared to 2020's estimated bookings of $555.3 million to $560.3 million.

Hand drawing stock chart return.

Image source: Getty Images

However, the impressive thing to note here is that the preliminary 2021 bookings guidance range does not include "contributions from the launch of four new original IP titles in 2021." So Glu Mobile is likely to achieve higher growth in 2021 depending on the performance of the four new titles -- Crowdstar Moments, Table & Taste, Deer Hunter World, and Tap Sports Fishing -- that will be launched in the new year.

Glu Mobile expects two of those titles, Table & Taste and Deer Hunter World, to generate individual bookings between $25 million and $75 million in their first year. Even the lower end of that range could add $50 million to Glu's bookings in 2021 and help the company record at least 16% growth over the 2020 bookings figure. The company hasn't provided the outlook for the other two games, but a strong showing from them could help Glu turn in yet another year of solid double-digit growth.

Some more reasons to go long

Glu Mobile has carried strong momentum into 2021, and it looks like it should be sustainable -- interest in mobile gaming is expected to remain high in a post-pandemic world. According to game market insight provider Newzoo, mobile gaming revenue was on track to jump 13.3% in 2020 to $77.2 billion.

Similar performance can be expected in 2021. The mobile gaming market is expected to clock a compound annual growth rate of 14% through 2025 as per another third-party report, driven by higher smartphone adoption globally and the rollout of 5G technology.

Glu Mobile is well-placed to take advantage of this growth on the back of an attractive portfolio of existing games that is set to expand further in 2021. And, given that the stock trades at just 16 times forward earnings, it isn't too late for investors to buy this growth stock, which looks set for more upside.

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.