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Strong Engagement to Drive Glu Mobile's (GLUU) Q3 Earnings

Glu Mobile Inc GLUU is slated to release third-quarter 2017 results on Nov 1.

We expect robust performance of Design Home, MLB Top Sports Baseball (TSB) 2017, Covet Fashion, Restaurant DASH with Gordon Ramsay and Kim Kardashian: Hollywood to drive top-line growth in the soon-to-be-reported quarter.

Design Home, TSB 2017 and Covet Fashion were the top three games with highest bookings in the last quarter.  The strong performance of these games helped the company to report solid Average Bookings per DAU in the last quarter.

This reflects improving engagement, which bodes well for the company. Glu expects bookings in the range of $78-$80 million in the third quarter.

Glu’s shares have returned 100.6% year to date, substantially outperforming the 48.2% rally of the industry.

Design Home: Key catalyst

In August, the social interactive interior design game Design Home hit the milestone of one million daily active users (DAUs), which is significant for the company’s top-line growth.

Design Home has been #1 Top Free and #17 Top Grossing game in the U.S. App Store for Apple Inc’s AAPL iPhone. Moreover, the game was #1 Top Free and #23 Top Grossing game in the U.S. Google Play Store.

Competition Intensifies

However, rising competition from established players like Electronic Arts and Activision Blizzard ATVI is a major concern.

Furthermore, we anticipate continuing investment in research and development of new game titles to remain an overhang on profitability in the near term.

Why a Likely Positive Surprise?

Nevertheless, our proven model shows that Glu is likely to beat earnings due to a favorable combination of a Zacks Rank #2 (Buy) and an Earnings ESP of +16.67%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are a couple of stocks you may consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter.

Activision Blizzard has an Earnings ESP of +5.80% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

HubSpot Inc HUBS has an Earnings ESP of +26.53% and carries a Zacks Rank #2 (Buy).

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Glu Mobile Inc. (GLUU): Free Stock Analysis Report
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