GameStop (NYSE:GME) Shares Gap Up After Strong 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) shares 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 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.19 by $0.06. GameStop had a return on equity of 7.72% and a net margin of 9.41%.The business had revenue of $972.20 million during the quarter, compared to analyst estimates of $823.25 million. During the same period in the prior year, the company posted $0.04 EPS. The business's revenue for the quarter was up 21.8% compared to the same quarter last year.

Analyst Ratings Changes

Separately, Wedbush upgraded GameStop to a "strong sell" rating in a research report on Tuesday, July 1st. One analyst has rated the stock with a Sell rating, According to MarketBeat, the stock has a consensus rating of "Sell" and a consensus target price of $13.50.

Insider Activity

In related news, General Counsel Mark Haymond Robinson sold 11,055 shares of the stock in a transaction on Wednesday, July 23rd. The stock was sold at an average price of $24.18, for a total transaction of $267,309.90. Following the completion of the sale, the general counsel directly owned 116,781 shares in the company, 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 legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders sold a total of 13,905 shares of company stock valued at $334,509 in the last ninety days. 8.58% of the stock is owned by corporate insiders.

Institutional Trading of GameStop

Hedge funds and other institutional investors have recently modified their holdings of the company. EverSource Wealth Advisors LLC raised its holdings in shares of GameStop by 226.6% during the second quarter. EverSource Wealth Advisors LLC now owns 1,277 shares of the company's stock worth $31,000 after acquiring an additional 886 shares in the last quarter. Ameritas Advisory Services LLC purchased a new stake in shares of GameStop during the second quarter worth $45,000. Hantz Financial Services Inc. raised its holdings in shares of GameStop by 1,523.7% during the second quarter. Hantz Financial Services Inc. now owns 2,127 shares of the company's stock worth $52,000 after acquiring an additional 1,996 shares in the last quarter. UMB Bank n.a. raised its holdings in shares of GameStop by 100.6% during the first quarter. UMB Bank n.a. now owns 3,651 shares of the company's stock worth $81,000 after acquiring an additional 1,831 shares in the last quarter. Finally, US Bancorp DE increased its position in GameStop by 92.5% during the first quarter. US Bancorp DE now owns 3,726 shares of the company's stock worth $83,000 after buying an additional 1,790 shares during the last quarter. 29.21% of the stock is currently owned by hedge funds and other institutional investors.

GameStop Price Performance

The company has a quick ratio of 10.79, a current ratio of 11.37 and a debt-to-equity ratio of 0.80. The stock has a market capitalization of $11.52 billion, a price-to-earnings ratio of 35.27 and a beta of -0.93. The company's 50-day simple moving average is $23.06 and its 200 day simple moving average is $24.92.

GameStop Company Profile

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.