What is more, Glu Mobile can bring new ideas to FIFA Coins EA about ways to monetize certain names. The business reported seeing favorable early results from this initiative around the last earnings call. Growth at a fair price.It's always worth checking the price a business is paying when it announces a significant acquisition. Across three popular valuation metrics, Glu Mobile seems like a fantastic value in the movie game industry.EA is spending $12.50 a share in money to Glu Mobile shareholders, which places the latter's price-to-free money flow multiple at 47.
On a forward price-to-earnings foundation, Glu trades in a multiple of 25, which looks like a relatively great deal in comparison to its bigger peer reviewed Zynga, which deals at a greater forwards P/E of $28. Glu can be a better deal on a price-to-sales basis with a multiple only under four, whereas Zynga transactions at nearer to 6 times earnings up there with the industry's leading gaming stocks.
EA's got cash to spare.EA entered calendar 2021 with loads of money to reinvest or acquire top-notch studios like Glu to extend its dominance from the gambling market.The company generated $1.9 billion in free cash flow during the previous four quarters.
Even the Codemasters price is expected to close this month, even while Glu Mobile must shut during the June-ending quarter. Even after these two deals are finish, EA will still have a couple billion dollars' worth of cash on the balance sheet together with almost $2 billion in free cash flow coming in every year.The addition of Glu Mobile will jump-start EA's expansion in a mobile market that climbed an estimated 25% this past year, reaching $86 billion in worldwide revenue, based on Newzoo.In short, this purchase is a significant upgrade for Electronic Arts' cell game business, which is why the stock surged to a new high on the information.
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