Glu Mobile (GLUU) to Report Q1 Earnings: What's in Store?

Glu Mobile Inc. GLUU is slated to release first-quarter 2018 results on May 1.

Last quarter, the company delivered a negative earnings surprise of 366.67%. Moreover, it has delivered an average negative earnings surprise of 177.74% in the trailing four quarters.

However, the mobile game maker posted revenues of $83 million in the last reported quarter, surpassing the Zacks Consensus Estimate of $79 million.

For first-quarter 2018, Glu Mobile expects bookings to be around $73 million.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Glu Mobile’s roster of games, especially evergreen titles, is one of its biggest positives. The company’s diverse gaming portfolio, which includes titles like Kim Kardashian: Hollywood, Design Home and Covet Fashion are driving top-line growth. Addition of new features and live operations are keeping the interest of users alive.

However, due to the end of the MBL season, management anticipates Tap Sports Baseball to decline at an increasing rate in the soon-to-be-reported quarter, as observed in the prior years.

The company launched MLB Tap Sports Baseball 2018 on the App Store and Google Play at the end of the quarter and thus no contribution is expected from it in the soon-to-be-reported quarter.

Unfortunately, Glu’s other celebrity titles like Restaurant Dash: Gordon Ramsay is also losing popularity.

Moreover, rising competition from established players like Electronic Arts EA and Activision Blizzard ATVI remains a concern. Furthermore, we anticipate significant investment in sales and marketing to remain an overhang on margins.

Glu Mobile Inc. Price and EPS Surprise

Glu Mobile Inc. Price and EPS Surprise | Glu Mobile Inc. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates, if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Glu has a Zacks Rank #3 and its Earnings ESP is 0.00%. Therefore, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.

A Stock With the Favorable Combination

Here is a company, which, as per our model, has the right combination of elements to post an earnings beat this quarter:

Seagate Technology PLC STX has an Earnings ESP of +3.43% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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