What Are Glu Mobile’s Prospects for 2020 After a Disappointing Year?

Glu Mobile (NASDAQ: GLUU) develops mobile games for smartphones and tablets. The company has released dozens of titles over recent years, but its revenue is highly concentrated in three titles: Covet Fashion, Design Home, and Tap Sports Baseball. Together, these contribute to roughly 75% of the total revenue.

Shares of Glu Mobile rose as high as $11.50 in April 2019, but steep drops following earnings announcements in May and August forced the price below $4.20. Some of the losses have since been clawed back, but the tech stock is still down 28% year-to-date at $5.85.

The year 2014 was the only year that Glu delivered positive net earnings for a full year in the past decade. Losses are acceptable in many circumstances for a company in growth mode because investments must be made in product development, corporate infrastructure, and marketing to achieve its desired scale. Glu's sales and marketing expenses were a heavy 36.5% of the top line over the first nine months of 2019, so it is fair to say that the company is still prioritizing growth over profitability.

Source Fool.com