It’s no question that the gaming industry is taking off. According to Newzoo, the global games market is expected to grow from $137.9 billion in 2018 to $180.1 billion in 2021.

With that in mind, investors are looking to capitalize on opportunities within this constantly evolving space. When looking for the most compelling investments in this industry, analysts tell investors that 3 gaming stocks look especially poised to outperform.

Let’s take a closer look at these 3 fast-growing gaming stocks.

Glu Mobile (GLUU)

Glu Mobile develops and publishes mobile games specifically for smartphones and tablets. Given the fact that shares are down 45% year-to-date, some analysts argue this gaming stock is undervalued.

The company’s second quarter earnings results seem to support this argument. On August 1, GLUU reported that it generated $101.9 million worth of bookings, the largest in its history. It also saw its sixth consecutive quarter of adjusted EBITDA profitability as well as launched two new games including WWE Universe and Diner Dash Adventures.

Adding to the good news, GLUU has made significant efforts to expand its user base to include female gamers who are typically underrepresented. It released the Design Home and the Kendall and Kylie game back in 2016, with the company stating that several more games for this target audience are in development.

One analyst points out that GLUU’s strategy of focusing more on games they fully own rather than celebrity licensed properties will pay off in the long-term.

“We believe there are multiple potential positive catalysts for the stock in 2020,” Wedbush analyst Michael Pachter stated. As a result, he reiterated his Buy rating and lowered the price target from $9 to $8 on August 2. The three-star analyst notes that the current share price of $4.44 presents a buying opportunity as he sees 80% upside potential for the stock.

All in all, the rest of the Street remains bullish on GLUU. It boasts a ‘Strong Buy’ analyst consensus and a $9 average price target, suggesting 92% upside potential.

SciPlay Corporation (SCPL)

The next gaming stock on our list has also had a bit of a rough going since its May 3 IPO. That being said, the online casino game company still offers investors plenty of upside potential.

Some analysts are picking SciPlay based on the results from its latest quarter. The company announced on August 1 that Q2 revenue reached $118.1 million, up 18% year-over-year which was more than double the market growth rate according to estimates from Eilers and Krejcik. It doesn't hurt that profits and cash flow also gained year-over-year.