Worth Comparing these two stocks: Glu Mobile Inc. (GLUU), Akamai Technologies, Inc. (AKAM)

The shares of Glu Mobile Inc. (NASDAQ:GLUU) and Akamai Technologies, Inc. (NASDAQ:AKAM) were among the active stocks of the last trading sessions. Glu Mobile Inc. (NASDAQ:GLUU) declined to -7.81% closing at the price of $5.78 whereas the shares of Akamai Technologies, Inc. (NASDAQ:AKAM) declined -3.74% with the decrease of -2.43 points closing at the price of $62.5. Glu Mobile Inc. has currently increase 49.35% in its stock over the period of 6-months while its rival Akamai Technologies, Inc. subtracted -13.1% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Glu Mobile Inc. (NASDAQ:GLUU) is -81.6% while the ROI of Akamai Technologies, Inc. (NASDAQ:AKAM) is 6.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GLUU’s EBITDA Margin is -23.48 whereas AKAM’s is 16.25.

Both the profitability ratios suggest that Akamai Technologies, Inc. (NASDAQ:AKAM) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Glu Mobile Inc. (NASDAQ:GLUU) reported $0.07/share EPS for the previous quarter where analysts were predicting an EPS to be $0.05/share Thus beating the analyst Estimates with a Surprise Factor of 40 Percent. While, Akamai Technologies, Inc. (NASDAQ:AKAM) reported EPS of $0.83/share in the last quarter. The analysts projected EPS of $0.8/share depicting a Surprise of 3.7 Percent.

Taking a look at Earnings per Share, Glu Mobile Inc. tends to be beating the analyst estimates more than Akamai Technologies, Inc.. so GLUU is more profitable than AKAM.

Technical Analysis of Glu Mobile Inc. & Akamai Technologies, Inc.

Moving average convergence divergence (MACD) shows that Glu Mobile Inc. (NASDAQ:GLUU) is on a PRICE RELATIVITY trend While Akamai Technologies, Inc. (NASDAQ:AKAM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Glu Mobile Inc. was in BEARISH territory and Akamai Technologies, Inc. was in BEARISH territory.

GLUU’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AKAM’s candle is BEARISH with HIGH.

EPS Growth Rate: GLUU’s 15% versus AKAM’s 17.11%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Glu Mobile Inc. (NASDAQ:GLUU) is predicted at 15% while Akamai Technologies, Inc. (NASDAQ:AKAM) stands at 17.11%. These numbers suggest that AKAM is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of GLUU stands at 1.2 while AKAM is at 2.2 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.44.

The values of the both ratios suggest that AKAM is more suitable investment when the liquidity and risk is the main concern.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2 for GLUU and 2.3 for AKAM which means GLUU has Buy rating whereas AKAM has Hold rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for GLUU is $7.29 which is 20.71% of its current price while AKAM has price target of 83.58 which is 25.22% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

GLUU currently has price to earning P/E ratio of 0 whereas AKAM has 53.01 while the forward P/E ratio for the prior stands at 16.61 and for the later it depicts the value of 16.43.

The price to Book P/B for GLUU is 4.94, Price to Sale is at 2.44 and for AKAM these ratios stand at 3.09 and 4.05.