Are these three mobile gaming stocks worth buying?

By Chris Lau for Kapitall.

Mobile game makers are having a hard time on the market these days. Zynga (ZNGA) failed to excite investors with its refresh of the flagship Farmville series. King Digital Entertainment (KING), which is known best for its Candy Crush game, is trading at or near all-time lows. Glu Mobile (GLUU) peaked at $7.47, only to close recently at $5.29. 

Glu Mobile is perhaps the most volatile and therefore most interesting mobile gaming play to watch right now. The firm scored a big win with a Kim Kardashian title, but has to pay a reported royalty rate of 30 – 40%. The stock fell again after a shelf filing for 10 million shares. These shares belong to Cie Games, which Glu announced it would acquire in July. Despite the recent dip, Glu still has a bright future, especially if strong sales for the Kardashian title continue.

However, it looks as though downside for Zynga may not end any time soon, although the company has three new game initiatives. Tiger Woods and NFL Showdown could do well for Zynga as the company moves into sports gaming for the first time.

A third initiative is a multi-year agreement with Warner Bros. Interactive Entertainment to license the Looney Tunes. Zynga expects to launch a Looney Tunes game before the holiday season. For 2014, Zynga forecast up to $725 million in bookings.

Trading close to 52 week low, King Digital might have further downside. Insider lockup ended on September 22. Some insiders agreed not to sell shares until fourth quarter earnings are reported by the firm. This would peg further insider sales until as late as February 2015. Last quarter, the company reported quarterly results that confirmed declining consumer interest in Candy Crush Saga. The firm missed on consensus earnings, while issuing a light forecast. 

Are you following the mobile gaming sector? Use the list below to begin your analysis and let us know what you think in the comments. 

Click on the interactive chart to view data over time. 

1. Glu Mobile, Inc. ( GLUU): Engages in the design, marketing, and sale of casual and traditional mobile games worldwide. Market cap at $340.48M, most recent closing price at $4.76.

 

2. King Digital Entertainment plc. ( KING): An interactive entertainment company, develops and publishes casual games on digital platforms. Market cap at $4.34B, most recent closing price at $13.44.

 

 

3. Zynga, Inc. ( ZNGA): Develops, markets, and operates online social games. Market cap at $2.67B, most recent closing price at $3.00.

(List compiled by Chris Lau. Monthly returns sourced from Zacks Investment Research.)

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