Analyst says Jamdat is poised for growth

Industry insiders are calling Jamdat Mobile one to watch in the coming months. Yesterday, the mobile-content publisher announced its fourth-quarter earnings for 2004. For the quarter ending December 31, 2004, revenues were up 22 percent sequentially from Q3--and up 122 percent from Q4 2003. For the calendar and fiscal year ending Dec 31, 2004, revenues were 171 percent higher than in 2003.

"[Jamdat] beat our estimates of $10.7 million in sales," Michael Wallace, an analyst with UBS Investment Research, said in a memo released today. Jamdat raked in $11.6 million in sales for the quarter. "Jamdat continues to grow faster than the overall US wireless games market and is making ongoing strides in diversifying its carrier base and product mix."

Jamdat (JMDT) scored a successful IPO on the Nasdaq Composite in September. The first day, it raised approximately $61 million from an initial offering of 5.5 million shares of stock. Today, Wallace held his rating for Jamdat (JMDT) stocks at "Neutral 2" and kept his price target for the company's shares at $23. Jamdat was trading above $22 in early February and opened Friday morning at $19.95.

In recent months, Jamdat has acquired Downtown Wireless, the developer of casino games like Downtown Texas Hold 'Em; has extended a deal with Atari to publish games like Scrabble, Yahtzee, and Boggle for mobile phones; and has contracted with RadioShack for the retailer to distribute Jamdat's content via kiosks located at RadioShack retail locations.

In his memo, Wallace noted that Jamdat plans to launch 10 new games in the first quarter of 2005, including Jamdat Bowling 3D, Tony Hawk 3D, MLB 2005, Yahtzee Deluxe, and new games from Downtown Mobile. In addition, "the ongoing popularity of the Downtown Texas Hold 'Em game (No. 2 game on Verizon) should help contribute to Jamdat's Q1 and FY05," Wallace said.

Yesterday, Jamdat execs forecasted revenues of $60 to $62 million in 2005, higher than UBS's estimates of $55.5 million.

Wallace also offered a carrier-by-carrier wrap-up of Jamdat's earnings. He wrote that Verizon accounted for 35 percent of the company's fourth-quarter sales, followed by Cingular at 17 percent and Sprint at 13 percent. "Jamdat expects Cingular to increasingly become one of its top carriers in 2005," he added.