NEW YORK (TheStreet) -- Glu Mobile (GLUU - Get Report) shares were upgraded to "buy" from "hold" with a $5.90 price target in a research report released by analysts at Benchmark on Wednesday.

The price target represents a 24% upside from the stock's previous closing price.

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Glu Mobile shares are down 0.4% to $.74 in early market trading however as the note advised investors that the video game company's Kim Kardashian video game is losing popularity, noting that downloads of the app have been falling.

However, the firm believes that the download rankings are not the most important factor in determining the company's viability.

"The Kim game continues to hold a strong position on iOS ranking charts, after a recent update, it is currently a top 6 grossing iOS app on US charts. We are less concerned over download rankings, as the game's player base has been effectively installed, while strong player engagement has maintained monetization strength," said analysts.

TheStreet Ratings team rates GLU MOBILE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate GLU MOBILE INC (GLUU) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been unimpressive growth in net income over time."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 29.0% when compared to the same quarter one year ago, falling from -$2.92 million to -$3.77 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, GLU MOBILE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for GLU MOBILE INC is currently very high, coming in at 71.10%. Regardless of GLUU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLUU's net profit margin of -9.21% significantly underperformed when compared to the industry average.
  • GLU MOBILE INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GLU MOBILE INC continued to lose money by earning -$0.28 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($0.20 versus -$0.28).
  • Compared to its closing price of one year ago, GLUU's share price has jumped by 89.20%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in GLUU do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: GLUU Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.