2015 expires in just three short days -- but for gamer Glu Mobile (NASDAQ:GLUU), the end can't come too soon. With its stock down 39% over the past 52 weeks, we expect Glu management will be happy to bid good riddance to the year -- but one analyst remains optimistic.

Should you stick with Glu?
On Monday, a holiday-abbreviated trading week opened with an announcement from banker Craig-Hallum that it's doubling down on its support of Glu Mobile, reiterating its buy rating -- even as it cuts its price target from $7 to just $4 per share.

That seems like a strange combination of actions: reiterating a buy, but cutting the target price. But as reported on TheFly.com this morning, Craig-Hallum has its reasons. According to the website, Craig is betting that a new "Kendall and Kyle Jenner game" due to launch in Q1 will send Glu on a run. Later on, new games from Glu's Cie subsidiary (acquired in 2014) offer additional chances for success. And around midyear, a partnership with China's Tencent Holdings will bring the chart-topping mobile game WeFire to the U.S.

All of this, Craig-Hallum hopes, will overcome a disappointing launch of Glu's new Katy Perry Pop game, and help to get Glu unstuck from its rut. If the analyst is right, investors can look forward to big profits from Glu Mobile in 2016, as the stock surges perhaps 60% from today's share price of $2.50 to as high as $4. But is Craig-Hallum right about this?

Let's go to the tape
While I'd love to be able to tell you that the chances for a rebound at Glu look great, the truth is that Craig-Hallum's record as an analyst suggests the opposite. Ranked in the bottom half of investors we track on Motley Fool CAPS, Craig-Hallum gets only about 40% of its recommendations right according to our research.

Its record in the software industry in particular isn't much better -- about 50%:

Company

 

Craig-Hallum Says:

CAPS Says:

Craig-Hallum's Picks Beating (Lagging) S&P By:

IntraLinks

Outperform

*

37 points

Bottomline Technologies

Outperform

Unrated

8 points

PROS Holdings

Outperform

*

(40 points)

Egain Corporation

Outperform

Unrated

(71 points)

So to date, the recommendations we have Craig-Hallum on record for include two stocks that CAPS investors hate -- and two more that are so deeply unpopular that CAPS members haven't even bothered to rate them. Needless to say, all four stocks are currently unprofitable -- just like Glu Mobile.

Valuing Glu Mobile
According to data from S&P Capital IQ, Glu Mobile has only earned a profit once in the past dozen years. After scoring a profitable 2014, Glu Mobile went right back to losing money in 2015. On the plus side, the company is free cash flow-profitable. But even so, it generated so little cash over the past year (just $2.3 million) that its price-to-free-cash-flow ratio sits in the triple digits.

Against a projected profits growth rate of just 15%, that valuation for Glu stock is probably too high -- even for a stock picker like Craig-Hallum, which seems to have a fondness for stocks that don't earn profits. Granted, it's a strategy that could pay off well if Glu does turn the corner and begin making money. But such success is anything but certain.

A better way to make money
So what's a better gaming stock to pick than Glu? Well,if lack of "GAAP" profits doesn't worry you -- and presumably it does not if you're considering Glu for investment in the first place -- I might suggest that Take-Two Interactive Software (NASDAQ:TTWO) is worth a look.

According to Yahoo! Finance, the stock's currently "unprofitable." But S&P Capital IQ data show that Take-Two Interactive generated more than $312 million in positive free cash flow over the past 12 months, and analysts have the stock pegged for 9% long-term profits growth over the next five years.

I calculate a very conservative fair value for the stock of $2.8 billion -- which is not too far off from the $3 billion market cap that Take-Two currently carries. It wouldn't take too much of a sell-off to bring this stock into "buyable" range. And indeed, if you're a bit of a risk-taker, the stock might already be cheap enough to be worth a gamble.

Worst case, even if it is a bit overvalued, Take-Two is still a better bargain than Glu Mobile.

Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 308 out of more than 75,000 rated members.

The Motley Fool recommends Take-Two Interactive. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.