GameStop (GME) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research downgraded shares of GameStop (NYSE:GME) from a hold rating to a sell rating in a research report sent to investors on Wednesday morning.

According to Zacks, “Shares of GameStop has not only declined but also underperformed the industry in a year’s time. Although GameStop’s revenues outpaced estimates in second-quarter fiscal 2018, earnings lagged the same. Also, earnings and revenues declined year over year. Furthermore, comps dipped in the quarter due to a decline in sales at international locations. Moreover, Technology Brands has been witnessing soft sales, primarily owing to store closures. A gradual shift to digital and mobile downloads is also posing a threat to its software business. Additionally, lower net sales led to dismal margins in the quarter.  Nevertheless, management reiterated fiscal 2018 view. Moving on, GameStop has been undertaking several initiatives to augment revenues. Further, we are encouraged by the rise in collectibles sales buoyed by continued expansion of licensed merchandise offerings and unique product offerings.”

Several other equities analysts have also recently issued reports on GME. Loop Capital reiterated a hold rating and issued a $16.00 target price on shares of GameStop in a research note on Monday, September 10th. Credit Suisse Group set a $15.00 target price on shares of GameStop and gave the company a hold rating in a research note on Friday, September 7th. Bank of America set a $10.00 target price on shares of GameStop and gave the company a sell rating in a research note on Wednesday, October 3rd. Wedbush set a $19.00 price objective on shares of GameStop and gave the stock a buy rating in a research report on Friday, August 31st. Finally, Jefferies Financial Group set a $18.00 price objective on shares of GameStop and gave the stock a buy rating in a research report on Wednesday, September 5th. Three investment analysts have rated the stock with a sell rating, four have assigned a hold rating and three have given a buy rating to the company’s stock. The stock currently has an average rating of Hold and a consensus price target of $14.50.

GME opened at $13.50 on Wednesday. The company has a quick ratio of 0.48, a current ratio of 1.45 and a debt-to-equity ratio of 0.39. GameStop has a 1 year low of $12.14 and a 1 year high of $20.31. The firm has a market capitalization of $1.40 billion, a P/E ratio of 4.04 and a beta of 1.13.

GameStop (NYSE:GME) last posted its earnings results on Thursday, September 6th. The company reported $0.05 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.08 by ($0.03). GameStop had a negative net margin of 0.48% and a positive return on equity of 13.78%. The firm had revenue of $1.65 billion during the quarter, compared to analyst estimates of $1.61 billion. During the same quarter in the prior year, the firm earned $0.15 earnings per share. The business’s revenue for the quarter was down 2.4% on a year-over-year basis. As a group, equities research analysts forecast that GameStop will post 3.05 earnings per share for the current fiscal year.

A number of large investors have recently bought and sold shares of the business. BlackRock Inc. raised its position in GameStop by 3.9% during the third quarter. BlackRock Inc. now owns 14,800,155 shares of the company’s stock worth $225,998,000 after acquiring an additional 550,779 shares during the period. FMR LLC raised its position in GameStop by 2.2% during the third quarter. FMR LLC now owns 14,544,866 shares of the company’s stock worth $222,100,000 after acquiring an additional 319,831 shares during the period. Vanguard Group Inc. raised its position in GameStop by 2.1% during the third quarter. Vanguard Group Inc. now owns 10,061,311 shares of the company’s stock worth $153,636,000 after acquiring an additional 206,731 shares during the period. Bank of New York Mellon Corp raised its position in GameStop by 3.4% during the third quarter. Bank of New York Mellon Corp now owns 3,032,862 shares of the company’s stock worth $46,313,000 after acquiring an additional 99,147 shares during the period. Finally, Wells Fargo & Company MN raised its position in GameStop by 93.2% during the second quarter. Wells Fargo & Company MN now owns 1,691,999 shares of the company’s stock worth $24,653,000 after acquiring an additional 816,080 shares during the period.

About GameStop

GameStop Corp. operates as a multichannel video game, consumer electronics, and wireless services retailer. It operates in five segments: United States, Canada, Australia, Europe, and Technology Brands. The company sells new and pre-owned video game hardware; video game software; pre-owned and value video games; video game accessories, including controllers, gaming headsets, virtual reality products, memory cards, and other add-ons; and digital products, such as downloadable content, network points cards, prepaid digital and prepaid subscription cards, and digitally downloadable software.

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