Israeli mobile developer Playtika upgrades investment rating and sees a rise in stock
Israeli mobile developer Playtika has received an upgrade in its investment rating from “Underperform” to “Neutral,” leading to a 4% increase in stock. Despite facing financial challenges and implementing restructuring and layoffs, Playtika’s focus on its existing portfolio has paid off. Analyst Omar Dessouky from the Bank of America upgraded the company’s investment rating, indicating that Playtika’s performance is not as bad as previously anticipated.
This upgrade reflects the belief that the potential recession may be shorter than expected, and in-app purchases for mobile games may only experience a minimal decline of 1% despite concerns about a post-Covid slump.
Playing nicely for Playtika?
Playtika’s efforts to cut costs through layoffs and concentrate on their current portfolio have proven beneficial. The company decided to suspend the development of new games until the return on investment becomes economically viable. This strategy has allowed Playtika to regain stability. CFO Craig Abrahams commented on the challenges they faced in scaling new games profitably due to the marketing environment and increasing costs per installation (CPIs).
Playtika’s optimistic initiatives, such as acquiring land in the Amazon and making a bid to buy Rovio, demonstrate their regained stability. This positive outlook from a major financial institution reflects the growing optimism and venture capital interest in the mobile gaming industry, despite challenging times in other areas of the tech sector. Mobile gaming continues to thrive globally.