GameStop's (GME) new management has to step up its game, says one of the few Wall Street analysts who still cover the retailer of physical video games.
"The longer we wait for new information from a new leadership team, the more the anticipation builds. But at some point, we worry the individual investor will grow restless. Recent headlines re: GameStop's involvement in the growing metaverse and NFT marketplace are intriguing, but still very difficult to size and to apply value in our financial model," said Jefferies analyst Stephanie Wissink. "We're taking a slight step back in our valuation framework. We were hopeful by this point that we'd have more to build from, especially given our enthusiasm re: GameStop's unique ability to monetize its CRM/gamer database."
Wissink reiterated a Hold rating on GameStop's stock and a $130 price target, relatively in line with the stock's current trading level.
The analyst's sharp comments on GameStop are hardly a shock if one follows the company closely.
The king of meme stocks — led by new CEO Matt Furlong (former Amazon exec) — hasn't expanded too much on its desire to morph into a tech company. Details are scant on GameStop's reported push into launching an NFT marketplace.
Furlong has taken no analyst questions on his first series of earnings calls — calls that have been bizarrely brief and absent details of any kind.
Hence, GameStop's stock has tanked 63% from its the meme stock frenzy of early 2021 as traders begin to assign a valuation on the company based on its fundamentals.
To be sure, those fundamentals continue to not be great and nowhere suggesting a turnaround is looming.
For the 39-weeks ended Oct. 30, GameStop has posted an operating loss of $201.7 million.
Points out Wissink, "Given the directive and talent changes, we anticipate the composition and sizing of revenue to be the primary driver of stock value."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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