Comparing Profitability of these two stocks: Glu Mobile Inc. (GLUU), Flotek Industries, Inc. (FTK)

The shares of Glu Mobile Inc. (NASDAQ:GLUU) and Flotek Industries, Inc. (NYSE:FTK) were among the active stocks of the last trading sessions. Glu Mobile Inc. (NASDAQ:GLUU) soared to 0.62% closing at the price of $8.15 whereas the shares of Flotek Industries, Inc. (NYSE:FTK) declined -25.1% with the decrease of -0.61 points closing at the price of $1.82. Glu Mobile Inc. has currently increase 50.09% in its stock over the period of 6-months while its rival Flotek Industries, Inc. subtracted -48.73% 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 Flotek Industries, Inc. (NYSE:FTK) is -1.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GLUU’s EBITDA Margin is -18.78 whereas FTK’s is -30.62.

Both the profitability ratios suggest a mixed sentiment for Glu Mobile Inc. (NASDAQ:GLUU) and Flotek Industries, Inc. (NYSE:FTK).

EPS & Surprise Factor

Glu Mobile Inc. (NASDAQ:GLUU) reported $0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.07/share Thus beating the analyst Estimates with a Surprise Factor of 14.3 Percent. While, Flotek Industries, Inc. (NYSE:FTK) reported EPS of $-0.06/share in the last quarter. The analysts projected EPS of $-0.11/share depicting a Surprise of 45.5 Percent.

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

Technical Analysis of Glu Mobile Inc. & Flotek Industries, Inc.

Moving average convergence divergence (MACD) shows that Glu Mobile Inc. (NASDAQ:GLUU) is on a PRICE RELATIVITY trend While Flotek Industries, Inc. (NYSE:FTK) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Glu Mobile Inc. was in BULLISH territory and Flotek Industries, Inc. was in BULLISH territory.

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

EPS Growth Rate: GLUU’s 15% versus FTK’s 10%

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 Flotek Industries, Inc. (NYSE:FTK) stands at 10%. These numbers suggest that GLUU 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 FTK is at 1.8 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.25.

The values of the both ratios suggest that FTK 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 2.2 for GLUU and 2.5 for FTK which means GLUU has Hold rating whereas FTK 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 $7.46 which is -9.25% of its current price while FTK has price target of 4 which is 54.5% 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 FTK has 0 while the forward P/E ratio for the prior stands at 23.42 and for the later it depicts the value of 0.

The price to Book P/B for GLUU is 6.97, Price to Sale is at 3.43 and for FTK these ratios stand at 0.54 and 0.38.