Accelerated Earnings Growth, But What’s Ahead for Glu Mobile Inc. (NASDAQ:GLUU)

Shares of Glu Mobile Inc. (NASDAQ:GLUU) have been experiencing an accelerated earnings and sales growth over the past 5 years.  Over that time frame the firm has seen earnings growth of 19.60% and sales growth of 28.30%.

Technical investors generally rely heavily on price charts to help spot potential trades. Chartists will often try to interpret past movements with the goal of trying to gauge the future share price movements. Some charts can be extremely complex while others may be quite simple. Many traders will spend countless hours studying the signals to try to spot optimal entry and exit points. There are many different indicators that technical analysts can follow. Some traders will use standalone signals, and others will use a robust combination. Getting into the nitty-gritty of charting can be overwhelming for the beginner. Taking the time to completely understand what the charts are saying can be the difference between a big win and a major loss.

While the firm has enjoyed the upward movement, it’s important to look at analyst expectations and where the company is headed from here.  On a consensus basis, analysts are projecting EPS growth of 46.15% for next year and have a $11.51 one year price target on the stock.   The stock recently traded at $8.86.

 Six Fundamental Characteristics of Great Growth Stocks

#6 Huge Mass Markets – The more potential customers there are, the greater the possibility that both the company, and the investment in said company, will be a success. 

#5 Market Dominance/Barriers to Entry – Look for companies who hold patents.  This is great barrier to entry, ensuring no competition.  Look for companies who dominate the market, blowing away the competition, though market dominance can be harder to measure. 

#4 Accelerating Earnings Growth – If a company’s earnings growth rate increases for two consecutive quarters, their growth is accelerating.  Faster growth is better growth, and a company whose earnings growth rate is accelerating is an attractive investment.

#3 Triple-Digit Revenue Growth – Companies growing their revenues at triple-digit rates (100% or better) are usually smaller and less known, making them attractive for buying by institutions. 

#2 High Profit Margins – In recent decades, high-margin stocks have beaten low-margin stocks by a huge amount. 

#1 Top Notch, Innovative Management – All great managers who led their companies to success usually did so by thinking differently.  There is no surefire and quick measurement of management talent.  When you find a top manager, one with a record of prior success and accolades, you should strike.  Top managers usually find a way to overcome obstacles. 

RECENT PERFORMANCE

Let’s take a look at how the stock has been performing recently.  Over the past twelve months, Glu Mobile Inc. (NASDAQ:GLUU)‘s stock was 6.94%.  Over the last week of the month, it was -5.99%, -9.35% over the last quarter, and  5.89% for the past six months. 

Earnings Per Share (EPS):

EPS is what each share is worth and indicates how much money their sharehoders would acquire if the company was to pay out all of its profits.  Earnings Per Share is computed by dividing the profit total by its share total.  If a company’s profit is $800 million and there are 40 million shares, then the EPS is $20.  EPS is a fantastic way to compare and contrast companies in the same industry.  When a company shows a steady upwards earnings trend, it is a good indicator that the company will dominate companies with a more volatile earnings trend. Glu Mobile Inc. (NASDAQ:GLUU)’s EPS is -0.04.  Last year, their EPS growth was 90.40% while their EPS growth over the past five years is 19.60%.  Analysts are predicting Glu Mobile Inc.’s stock to grow 46.15% over the next year and 15.00% over the next five.

As any seasoned investor knows, trading stocks can be both exiting and scary. Figuring out how to profit in the market may take a lot of time and dedication. Many novice investors may jump into the markets without any kind of research. Some people may prefer to let professionals deal with their investments. With so much available information, investors may need to find out how to separate the important data from the unimportant data. As we move further into the second half of the year, investors are most likely monitoring market momentum to try and figure out how stocks will finish the year. With the stock market still trading at high levels, investors may be looking for certain stocks that still have room to move higher. Finding these stocks may be tricky, but doing the necessary research may help spot some names that will make a positive impact on the future of the portfolio.  

Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

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