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GDEV Surges 23% in a Month: Is it too Late to Buy the Stock?

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GDEV Inc. (GDEV - Free Report) recently experienced a sharp increase in its stock price. In the past month, the company’s shares have gained 23.2%, outpacing the industry’s growth of 2.9%. GDEV has also outshined the S&P 500 and the Zacks Consumer Discretionary sector’s growth of 3.9% and 3.9%, respectively.

The stock closed at $31.41 yesterday, below its 52-week high of $37.89 but above its 52-week low of $19. Other major industry players like Caesars Entertainment, Inc. (CZR - Free Report) , MGM Resorts International (MGM - Free Report) and Boyd Gaming Corporation (BYD - Free Report) rose 11.8%, 5.9% and 2.5%, respectively, in the past month.

GDEV Stock’s Price Performance

Zacks Investment Research
Image Source: Zacks Investment Research

Technical indicators suggest continued strong performance for GDEV. The stock is trading above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in GDEV's financial health and prospects.

50-Day Moving Average

Zacks Investment Research
Image Source: Zacks Investment Research

With GDEV's recent gain, investors are eyeing the stock for a potential breakout that could pave the way for significant upward movement. Let us dive deeper into the factors driving this upward trend.

Factors Favoring GDEV

The company’s refined strategic vision, which emphasizes sustainable growth and operational efficiency bodes well. GDEV’s focus on delivering top games, coupled with the recruitment of industry talent, supports its commitment to creating exceptional player experiences and solidifying the company’s market position for long-term success.

GDEV is committed to improving the company’s business efficiency while focusing on enhancing the overall gaming experience across its portfolio. In the next few quarters, the company aims to prioritize product development across all titles and platforms. In line with this strategy, GDEV is adopting a disciplined approach to user acquisition. Rather than scaling marketing investments currently, the company plans to reserve cash for future investments, targeting user cohorts that demonstrate strong returns. By doing so, GDEV seeks to refine its products before allocating additional resources toward expanding the company’s player base.

GDEV's strategy for the remainder of the year focuses heavily on improving its core franchises to drive growth. The company is concentrating on enhancing the user experience, aiming to boost player retention, engagement and monetization. By increasing these key metrics, GDEV expects to improve the lifetime value of its players.

The company is also benefiting from successful product initiatives. The launch of Pixel Gun 3D on the Steam platform resulted in a 10% increase in monthly active users and 45% growth in monthly paying users, indicating strong brand recognition and community support. The Hero Wars franchise achieved significant milestones, including a collaboration with Lara Croft, leading to increased brand interest and player acquisition.

Estimate Revision Favoring GDEV Stock

Reflecting the positive sentiment around GDEV, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 60 days, analysts have raised their estimates for the current and the next year by 300% to 60 cents and by 126.7% to $1.36 per share, respectively.

GDEV Trading at a Discount

The company is currently valued at a discount compared with the industry’s forward 12-month P/E basis. GDEV’s forward 12-month price-to-earnings ratio stands at 26.25, lower than the industry’s ratio of 28.37.

End Notes

GDEV has experienced a sharp stock price increase in the past month. This strong performance is supported by positive technical indicators, with the stock trading above its 50-day moving average, suggesting continued momentum. GDEV's strategic focus on operational efficiency, sustainable growth and disciplined user acquisition is driving investor confidence. It is also benefiting from successful product initiatives and is well-positioned for long-term growth. Additionally, with favorable earnings estimate revisions and trading at a discount relative to its peers, GDEV presents an attractive investment opportunity for those seeking growth in the gaming industry. The company currently sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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