Playtika bounces back as bank upgrades mobile developer from "Underperform" to "Neutral"
Israeli mobile developer Playtika has received an investment rating upgrade from "Underperform" to "Neutral," leading to a 4% rise in its stock value. The company had previously faced financial challenges, which resulted in restructuring, layoffs, and the cancellation of future developments in favor of focusing on its existing portfolio.
The upgrade indicates that analysts believe Playtika's performance is improving and may not underperform in the stock market as previously anticipated. The optimism is driven by expectations that a potential recession could be shorter than feared, and in-app purchases for mobile games may only see a slight decline of around 1% despite concerns of a post-Covid slump.
Playtika's efforts to cut costs and concentrate on growing its existing portfolio of mobile games and leisure titles seem to have paid off, contributing to the company's regained stability. The decision to suspend new game development was based on the challenging marketing environment and increasing costs for acquiring new players.
The company's recent initiatives, such as acquiring land in the Amazon and making an offer to buy Rovio, demonstrate its newfound stability. The fact that financial institutions are optimistic about mobile gaming in the second half of 2023 reflects the growing interest and optimism in the mobile gaming sector, even amidst challenges in other areas of the broader tech industry. Mobile gaming continues to show strong growth worldwide.
Source: Iwan Morris, Staff Writer at PocketGamer