GameStop (NYSE:GME) Shares Gap Up on Better-Than-Expected Earnings

Key Points

• GameStop's shares gapped up from $23.59 to $25.21 after reporting better-than-expected earnings of $0.25 per share, exceeding the consensus estimate of $0.19.
• The company saw a 21.8% increase in revenue year-over-year, with total revenue at $972.20 million, surpassing analyst estimates of $823.25 million.
• Despite the positive earnings report, analysts have issued a "strong sell" rating for GameStop, with an average price target of $13.50.

GameStop Corp. (NYSE:GME - Get Free Report) gapped up prior to trading on Wednesday following a stronger than expected earnings report. The stock had previously closed at $23.59, but opened at $25.21. GameStop shares last traded at $25.33, with a volume of 14,161,504 shares.

The company reported $0.25 EPS for the quarter, topping the consensus estimate of $0.19 by $0.06. GameStop had a return on equity of 5.25% and a net margin of 5.67%.The company had revenue of $972.20 million during the quarter, compared to analyst estimates of $823.25 million. During the same quarter in the previous year, the firm earned $0.04 earnings per share. GameStop's revenue was up 21.8% on a year-over-year basis.

Analysts Set New Price Targets

Separately, Wedbush upgraded shares of GameStop to a "strong sell" rating in a report on Tuesday, July 1st. One investment analyst has rated the stock with a Sell rating, According to data from MarketBeat.com, the company has an average rating of "Sell" and an average price target of $13.50.

Insider Activity at GameStop

In other GameStop news, General Counsel Mark Haymond Robinson sold 11,055 shares of the firm's stock in a transaction dated Wednesday, July 23rd. The stock was sold at an average price of $24.18, for a total value of $267,309.90. Following the transaction, the general counsel directly owned 116,781 shares of the company's stock, valued at approximately $2,823,764.58. This trade represents a 8.65% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Insiders sold 13,905 shares of company stock worth $334,509 over the last 90 days. Company insiders own 8.58% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the stock. Triumph Capital Management bought a new stake in GameStop during the 4th quarter valued at approximately $253,000. Ameriprise Financial Inc. increased its position in shares of GameStop by 1.4% during the 4th quarter. Ameriprise Financial Inc. now owns 372,902 shares of the company's stock valued at $11,687,000 after purchasing an additional 5,300 shares during the last quarter. Cetera Investment Advisers increased its position in shares of GameStop by 29.2% during the 4th quarter. Cetera Investment Advisers now owns 28,385 shares of the company's stock valued at $890,000 after purchasing an additional 6,411 shares during the last quarter. Deutsche Bank AG increased its position in shares of GameStop by 1,010.4% during the 4th quarter. Deutsche Bank AG now owns 213,873 shares of the company's stock valued at $6,703,000 after purchasing an additional 194,612 shares during the last quarter. Finally, Janus Henderson Group PLC grew its position in GameStop by 5.0% in the 4th quarter. Janus Henderson Group PLC now owns 192,005 shares of the company's stock valued at $6,015,000 after acquiring an additional 9,100 shares during the last quarter. Institutional investors own 29.21% of the company's stock.

GameStop Stock Up 6.7%

The company has a 50-day simple moving average of $23.00 and a 200 day simple moving average of $24.92. The company has a market cap of $11.26 billion, a P/E ratio of 54.70 and a beta of -0.93. The company has a current ratio of 8.39, a quick ratio of 7.89 and a debt-to-equity ratio of 0.30.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads.

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