July 21 (Bloomberg) -- Glu Mobile Inc., the game maker that signed Kim Kardashian’s name to a new app, surged to the highest in more than six years after a Cowen & Co. analyst almost doubled his price target on the shares.
The stock jumped 10 percent to $7.47 at the close in New York, the biggest intraday price since November 2007. San Francisco-based Glu had advanced 75 percent this year through July 18.
Doug Creutz, an analyst at Cowen in San Francisco, raised his price target to $10 from $6 and said that the popularity of Kim Kardashian: Hollywood may help boost Glu’s revenue this year to more than $200 million. Creutz, who has a buy rating on the shares, also boosted his full-year earnings per share estimate to 26 cents from 3 cents.
The Kardashian game, which was released last month, creates Glu’s second major franchise, a title that’s a different genre from its existing Deer Hunter game, Creutz said in a note to clients. It “very strongly suggests that Glu has indeed developed a much more potent and broadly applicable approach to game monetization,” he said.
Since the beginning of July, Kim Kardashian: Hollywood has “consistently” been the No. 4 top-grossing U.S. game at Apple Inc.’s U.S. App store, Creutz said.
The game features a virtual Kim guiding users through Hollywood and offering advice on how to become an A-list celebrity, starting from the so-called E-list. “Dating famous people will get you more fans, too,” instructs Kardashian, who in real life is married to rap singer Kanye West.
“No one could have predicted it would be this good,” Sean McGowan, an analyst with Needham & Co. in New York, said in an interview. “It could fall off tomorrow. It just means they have a monster by the tail, producing tens-of-millions more than anyone expected,” he said.
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