A deep pipeline of new games.The development pipeline at Glu Mobile looks quite promising. It has new titles set to FIFA Mobile Coins launch soon, including Harness Sports Fishing, Deer Hunter World, along with a upgraded version of Harness Sports Baseball for its 2021 season. EA plans to bring Tap Baseball to new countries with its licensing experience from EA Sports.There can be Table & Flavor, a brand new lifestyle sport, along with a range of hyper-casual games starting from Glu's Crowdstar studio.
What's more, Glu Mobile could bring fresh ideas to EA about ways to decorate certain names. By way of instance, Glu recently relaunched an e-commerce shop in Design Home, making it the first game business to try out this special angle of in-game monetization. The company reported seeing favorable early outcomes from this initiative on the very last earnings call.
Growing at a fair price.It's always worth checking the price a business is paying when it declares a significant acquisition. As Warren Buffett has said,"Price is what you pay, value is what you get." Across three hot test metrics, Glu Mobile seems just like a good value in the video game industry.EA is spending $12.50 a share in cash to Glu Mobile shareholders, which puts the latter's price-to-free money flow multiple at 47.
On a forward price-to-earnings foundation, Glu trades at a multiple of 25, that resembles a relatively great deal compared to its larger peer Zynga, which deals at a higher forward P/E of $28. Glu can be a much better deal on a price-to-sales foundation using a multiple just under four, while Zynga transactions at nearer to 6 times earnings , up with all the industry's top video game stocks.
EA's got money to spare.EA entered calendar 2021 having plenty of money to reinvest or obtain top-notch studios such as Glu to extend its dominance in the gaming market.The company generated $1.9 billion in free cash flow over the last four quarters. That's on top of the $6.7 billion in cash and Buy FIFA Coins short term investments on the balance sheet at the end of 2020.
