Glu Mobile's (GLUU) Price Target Raised to $9 at Piper Jaffray

Piper Jaffray maintained an Overweight rating on Glu Mobile (NASDAQ: GLUU) and raised its price target to $9.00 (from $7.50). The change follows the company's analyst day, which analyst Michael J. Olson noted provided context around long term growth objectives.

"We continue to believe that Glu is relatively well positioned vs. other publicly traded mobile game companies, given a focus on games that leverage exclusive content enabling earlier title announcements and higher visibility for investors. Looking at 2015, and beyond, there appear to be multiple potential levers for upside vs. estimates, but Glu is prudently guiding conservatively as mobile game development can prove to be a volatile business. The pipeline for 2015 is somewhat back-end-loaded, but appears strong and will offset some of the decline in KKH and drive a more diverse revenue mix," said Olson.

"We continue to believe that Glu has an advantage over other publicly traded mobile gaming companies in that it can provide relatively higher level of visibility into its pipeline, given that the majority of the company's titles center around exclusive content. Glu reiterated its Q2 and FY15 guidance at yesterday's meeting, but also provided an overview of expectations for revenue and EBITDA margin through 2020. On the top line, the company sees a potential revenue run rate of $1.3-$1.7B by 2020, with an EBITDA margin of 20-25%. This 2020 revenue level is, at this point, anticipated to be fairly evenly split between core IP (Deer Hunter, etc) and celebrity titles. We believe the company's long-term assumptions are reasonable, given they do not assume any hits that are larger than pre-existing hit titles," added the analyst.

For an analyst ratings summary and ratings history on Glu Mobile click here. For more ratings news on Glu Mobile click here.

Shares of Glu Mobile closed at $6.47 yesterday.

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