What is more, Glu Mobile can bring fresh ideas to EA about FIFA Mobile Coins ways to monetize certain names. The company reported seeing positive early outcomes from this initiative around the last earnings call. Growth at an unbiased price.It's always worth checking the price that a business is paying when it announces a major acquisition. Around three hot valuation metrics, Glu Mobile looks just like a good value in the video game industry.EA is spending $12.50 a share in money to Glu Mobile shareholders, which puts the latter's most price-to-free cash flow multiple at 47.
On a forwards price-to-earnings foundation, Glu trades in a multiple of 25, which resembles a relatively good deal compared to its bigger peer reviewed Zynga, which deals at a higher forwards P/E of 28. Glu is also a much better bargain on a price-to-sales foundation with a multiple only under four, whereas Zynga transactions at closer to 6 times salesup with all the industry's leading gaming stocks.
EA's earned money to spare.EA entered calendar 2021 having tons of cash to reinvest or obtain elite studios like Glu to extend its dominance in the gambling market.The company made $1.9 billion in free cash flow during the last four quarters. That is in addition to the $6.7 billion in cash and short-term investments on the balance sheet at the end of 2020.
Even after these two prices are entire, EA will still have a couple billion dollars' worth of money on the balance sheet with almost $2 billion in free cash flow coming in every year.The addition of Glu Mobile will jump-start EA's growth in a cell market that grew an estimated 25% this past year, reaching $86 billion in worldwide revenue, based on Newzoo.In short, this purchase is a major upgrade for Digital Arts' mobile game business, which is the reason why the stock surged to a new top on the news.
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