What is more, FIFA Mobile Coins could bring fresh ideas to EA about ways to decorate certain titles. The business reported seeing positive early results from this initiative about the last earnings call.
Growing at a fair price.It's always worth checking the cost that a provider is paying when it announces a significant acquisition. Across three popular test metrics, Glu Mobile looks like a good value in the movie game industry.EA is paying $12.50 per share in money to Glu Mobile shareholders, which puts the latter's price-to-free money flow multiple at 47.
On a forwards price-to-earnings basis, Glu trades at a multiple of 25, that looks like a relatively great deal in comparison to its bigger peer reviewed Zynga, which trades at a higher forward P/E of 28. Glu is also a much better bargain on a price-to-sales basis with a multiple just under four, whereas Zynga transactions at closer to 6 times earnings , up with all the industry's leading gaming stocks.
EA's got money to spare.EA entered calendar 2021 having plenty of cash to reinvest or obtain elite studios like Glu to extend its dominance in the gaming market.The company generated $1.9 billion in free cash flow during the last four quarters. That's in addition to the $6.7 billion in cash and short-term investments in the balance sheet at the end of 2020. Even after these two prices are full, EA will still have a couple billion bucks' worth of cash on the balance sheet with nearly $2 billion in free cash flow coming in every year.The inclusion of Glu Mobile will jump-start EA's growth in a cell market that grew an estimated 25 percent last year, reaching $86 billion in worldwide revenue, according to Newzoo.In short, this acquisition is a significant upgrade for Digital Arts' cell game business, and that's why buy FIFA Mobile Coins the stock surged to a new high on the news.