Zynga Vs. Glu Mobile: Which Mobile Gaming Stock is a Better Buy?

NASDAQ: ZNGA | Zynga Inc. -  News, Ratings, and Charts

ZNGA – Mobile gaming is gaining steam as more people kill time through playing games on their smartphones. This has led to strong gains in companies such as Zynga (ZNGA) and Glu Mobile (GLUU). But which is a better Buy now? Read more to find out.

It was not long ago when mobile gaming was thought of as a phenomenon somewhat unique to Asian countries. In particular, handheld gaming is especially popular in Japan. However, the United States is becoming more and more like Japan with each passing day. Hop on a local subway car, ride the train or ask your kids what their friends are doing while killing time on the bus, and you will find mobile gaming has become quite popular.

In fact, mobile gaming is taking off worldwide as many more top-notch games are made playable on phones and portable gaming consoles such as the Nintendo Switch. Though most people do not own a Switch console, the vast majority of people own smartphones. The rise of smartphone gaming is benefiting Zynga (ZNGA) and Glu Mobile (GLUU). 

Let’s take a look at both stocks to determine which is better for your portfolio.

The Analysts are Bullish on ZNGA and GLUU

The analysts who have performed an in-depth analysis of these gaming companies agree the future looks fantastic for both, mainly because mobile is the fastest-growing gaming industry segment. Analysts have set an average price target of $12.31 for ZYNGA, meaning it has a potential 23% upside. Each of the nine analysts who cover the stock recommends it as a “Buy,” which is certainly a positive for the company. Analysts have set an average price target of $12.33 for GLUU, indicating the stock has a potential upside of 30%.

The POWR Ratings show GLUU has an “A” grade in the Trade Grade and Industry Rank components. GLUU also has a “B” grade in the Buy & Hold Grade component. Of the 15 stocks in the Entertainment – Toys & Video Games industry, GLUU is ranked ninth. ZNGA’s POWR Ratings are even better, highlighted by an “A” grade in the Industry Rank and Trade Grade components along with a “B” Buy & Hold Grade. ZNGA is ranked eighth in the same industry.

What About the Games?

Let’s cut to the chase. The quality of ZNGA and GLUU games will ultimately determine which of these stocks emerges as the winner. However, if you are like most investors, you don’t spend an abundance of time playing mobile games on your smartphone. Even if you are a non-gamer or only play games from time to time, you will have likely heard of one of ZNGA’s top titles, Words With Friends

Other ZNGA titles include Empires & PuzzlesCSR RacingZynga Poker, and Merge Dragons. Add in the fact that ZNGA personnel is hard at work, creating a new studio to develop Star Wars games, and you have all the more reason to be bullish about the stock’s future.

GLUU’s games are not as popular as ZNGA’s, yet still have their merits. GLUU titles include Tap Sports BaseballCovet FashionDiner Dash AdventuresDisney Sorcerer’s Arena, and Design Home. The alliance with Disney (DIS) certainly bodes well for GLUU. However, at this point, ZNGA has a slightly superior collection of games.

Which is the Better Value?

ZNGA currently has a forward P/E ratio of 26.42, indicating the stock might be slightly overvalued at its current trading price of around $10. It is particularly interesting to note ZNGA is less than 75 cents away from its 52-week high of $10.69, a price point that could be easily surpassed as the upcoming holiday season unfolds.

GLUU’s forward P/E ratio is slightly lower at 23.58. GLUU is $1.30 away from its 52-week high of $10.85. The stock is currently trading at more than double its 52-week low mark of $3.98.

Take a look at ZNGA’s one-year chart, and you will find it appears as though the stock has established a price floor at $7.90. The stock bounced back up to $10 after hitting this floor last month. GLUU appears to have established a price floor at $6.90. The stock dropped to this floor in November and popped right back to life, soaring slightly above $10 across the next month.

The Verdict

The better of these two mobile gaming stocks might end up being the one that makes the most prudent acquisitions moving forward. ZNGA’s purchase of Peak Games brings Toy Blast and Toon Blast games into the fold. Though the deal set ZNGA back nearly $2 billion, the move will likely boost the company’s mobile user base by over 60%.

GLUU CEO Nick Earl has stated the company has ample capital available for potential acquisitions. There is always a chance that DIS makes a move to acquire GLUU following the tandem’s successful collaboration on the Disney Sorcerer’s Arena, as noted above. However, it is much more likely that GLUU will acquire smaller gaming companies to expand its library of games.

In the end, investors could consider adding both ZNGA and GLUU to their portfolios. However, if you have to choose one of these two mobile gaming powerhouses, ZNGA appears to be the better choice, primarily because its games are more popular and have broader appeal than those offered by GLUU.

Want More Great Investing Ideas?

“MUST OWN” Growth Stocks for 2021

5 WINNING Stocks Chart Patterns

7 Best ETFs for the NEXT Bull Market


ZNGA shares . Year-to-date, ZNGA has gained 62.25%, versus a 16.33% rise in the benchmark S&P 500 index during the same period.


About the Author: Patrick Ryan


Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ZNGAGet RatingGet RatingGet Rating
GLUUGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Stock Market “Nausea Index” Going Off

The stock market (SPY) has seen fresh lows this week scaring many investors into selling their positions. On the other hand, 40 year investment veteran shares a proprietary market indicator that points to a significant bounce coming soon. Is he right? You be the judge by reading below.

:  |  News, Ratings, and Charts

3 Stocks that Are Thriving in an Inflationary Environment

Inflation is one of the biggest threats facing the economy. One profitable strategy during this period of high inflation is to focus on stocks that have pricing power, as these companies’ margins will continue to expand. In contrast, stocks without pricing power are likely to underperform as margin compression erodes EPS. Therefore, investors should consider buying these 3 stocks that are thriving in this inflationary environment: Olin (OLN), Nucor (NUE), and Chemours (CC).

:  |  News, Ratings, and Charts

Is the Bear Market Here?

We are witnessing the nastiest stock market (SPY) correction since Covid first came on the scene. That has some pondering if the next bear market is upon us. 40 year veteran investor Steve Reitmeister gives his clear eyed view on the market outlook and trading plan in this timely commentary. Get the full story below...

:  |  News, Ratings, and Charts

4 Best Value Stocks to Buy in January

In times of high inflation, value stocks tend to outperform growth stocks and have done so over the past year. Amid the rising inflationary pressure and looming interest rate hikes, fundamentally sound value stocks ArcelorMittal (MT), Covestro (COVTY), KT Corporation (KT), and Nature’s Sunshine (NATR) could be solid bets.

:  |  News, Ratings, and Charts

Is the Bear Market Here?

We are witnessing the nastiest stock market (SPY) correction since Covid first came on the scene. That has some pondering if the next bear market is upon us. 40 year veteran investor Steve Reitmeister gives his clear eyed view on the market outlook and trading plan in this timely commentary. Get the full story below...

Read More Stories

More Zynga Inc. - (ZNGA) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ZNGA News