GameStop (NYSE:GME) Trading Up 4.9% After Insider Buying Activity

Key Points

• GameStop shares rose 4.9% to approximately $19.82 after Director Lawrence Cheng bought 55,000 shares for about $1.03 million, increasing his ownership by 62.5%.
• GameStop reported quarterly EPS of $0.27, in line with estimates, while revenue of $790.2 million exceeded expectations of roughly $756.9 million; however, revenue fell 18.7% year over year and EPS declined from $0.31.
• Analyst sentiment remains cautious, with the consensus rating at “Hold” as investors weigh collectibles growth and cash deployment against weakness in the company’s traditional video-game business.

Shares of GameStop Corp. (NYSE:GME - Get Free Report) shot up 4.9% during trading on Wednesday following insider buying activity. The stock traded as high as $19.89 and last traded at $19.8170. 3,390,734 shares were traded during trading, a decline of 51% from the average daily volume of 6,979,305 shares. The stock had previously closed at $18.89.

Specifically, Director Lawrence Cheng purchased 55,000 shares of GameStop stock in a transaction dated Tuesday, September 8th. The shares were purchased at an average cost of $18.80 per share, for a total transaction of $1,034,000.00. Following the completion of the acquisition, the director owned 143,000 shares in the company, valued at $2,688,400. This represents a 62.50% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available at this hyperlink.

Wall Street Analyst Weigh In

GME has been the subject of a number of recent analyst reports. Wall Street Zen cut GameStop from a "buy" rating to a "hold" rating in a report on Monday. Weiss Ratings reiterated a "hold (c)" rating on shares of GameStop in a research note on Wednesday, July 29th. One research analyst has rated the stock with a Hold rating, According to data from MarketBeat, the company currently has a consensus rating of "Hold".

More GameStop News

Here are the key news stories impacting GameStop this week:

• Positive Sentiment: GameStop reported adjusted EPS of $0.27, matching or exceeding consensus estimates of $0.19–$0.27 depending on the source. Revenue of $790.2 million also topped expectations of approximately $756.8 million, with collectibles providing a key source of strength. GameStop beats second-quarter estimates on collectibles
• Positive Sentiment: Director Lawrence Cheng purchased 55,000 GME shares for approximately $1.03 million at $18.80 per share, increasing his direct ownership by 62.5%. The insider purchase may signal confidence in the company’s valuation or prospects. GameStop director insider purchase
• Positive Sentiment: Reports that profit growth supported an improved full-year outlook could give investors greater confidence in GameStop’s near-term earnings power. GameStop profit rises and boosts full-year outlook
• Neutral Sentiment: Investors are watching how Chairman Ryan Cohen deploys GameStop’s multibillion-dollar cash reserves. Possible acquisitions or strategic investments, including speculation involving eBay, could significantly affect GME, but no deal was confirmed. GameStop’s next big move
• Negative Sentiment: Revenue declined 18.7% year over year to $790.2 million from $972.2 million, while EPS fell from $0.31 to $0.27. The earnings beat therefore reflects lower expectations rather than renewed sales growth. GameStop quarterly earnings results
• Negative Sentiment: Analysts have cautioned that collectibles growth and potential eBay-related gains could be masking continued weakness in GameStop’s traditional video-game business. Wall Street sentiment remains conservative, with coverage generally centered on “Hold” ratings. GameStop earnings preview

GameStop Stock Up 4.9%

The company has a current ratio of 12.40, a quick ratio of 11.91 and a debt-to-equity ratio of 0.71. The business has a 50-day moving average price of $20.16 and a 200-day moving average price of $22.04. The firm has a market cap of $8.89 billion, a P/E ratio of 15.01 and a beta of 1.72.

GameStop (NYSE:GME - Get Free Report) last released its quarterly earnings data on Tuesday, September 8th. The company reported $0.27 earnings per share for the quarter, meeting the consensus estimate of $0.27. GameStop had a return on equity of 13.75% and a net margin of 20.45%.The firm had revenue of $790.20 million during the quarter, compared to the consensus estimate of $756.85 million. During the same period in the previous year, the company posted $0.31 earnings per share. The firm's quarterly revenue was down 18.7% on a year-over-year basis.

Institutional Investors Weigh In On GameStop

Several large investors have recently modified their holdings of the business. Northwestern Mutual Investment Management Company LLC increased its holdings in GameStop by 0.5% during the fourth quarter. Northwestern Mutual Investment Management Company LLC now owns 92,197 shares of the company's stock valued at $1,851,000 after buying an additional 463 shares during the period. Public Employees Retirement System of Ohio lifted its position in GameStop by 0.4% during the third quarter. Public Employees Retirement System of Ohio now owns 131,002 shares of the company's stock valued at $3,574,000 after acquiring an additional 578 shares during the last quarter. Panagora Asset Management Inc. boosted its stake in GameStop by 4.5% in the fourth quarter. Panagora Asset Management Inc. now owns 13,692 shares of the company's stock valued at $275,000 after acquiring an additional 594 shares in the last quarter. UMB Bank n.a. grew its holdings in GameStop by 14.5% in the fourth quarter. UMB Bank n.a. now owns 4,694 shares of the company's stock worth $94,000 after purchasing an additional 595 shares during the last quarter. Finally, Rakuten Securities Inc. lifted its holdings in shares of GameStop by 9.4% during the 2nd quarter. Rakuten Securities Inc. now owns 7,572 shares of the company's stock valued at $185,000 after purchasing an additional 650 shares during the last quarter. Institutional investors own 29.21% of the company's stock.

GameStop Company Profile

GameStop Corp. NYSE: GME is a global specialty retailer focused on video games, gaming consoles, consumer electronics and related accessories. The company operates a network of physical retail stores alongside an e-commerce platform, offering new and pre-owned products spanning the latest game software, hardware, collectibles and lifestyle merchandise. GameStop's retail footprint is complemented by digital marketplaces for trade-ins and online purchases, as well as a membership program that provides exclusive content and rewards.

Originally founded in 1984 as Babbage's in Dallas, Texas, the company adopted the GameStop name in 1999 following its merger with Software Etc.

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