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GameStop (GME) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

GameStop (GME) closed the most recent trading day at $8.65, moving -1.26% from the previous trading session. This change lagged the S&P 500's daily gain of 0.1%. Elsewhere, the Dow gained 0.15%, while the tech-heavy Nasdaq lost 0.66%.

Heading into today, shares of the video game retailer had lost 15.53% over the past month, lagging the Retail-Wholesale sector's gain of 3.75% and the S&P 500's gain of 3.95% in that time.

Wall Street will be looking for positivity from GME as it approaches its next earnings report date. The company is expected to report EPS of $1.59, up 318.42% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.67 billion, down 13.9% from the year-ago period.

GME's full-year Zacks Consensus Estimates are calling for earnings of $1.55 per share and revenue of $7.74 billion. These results would represent year-over-year changes of -27.57% and -11.36%, respectively.

Investors might also notice recent changes to analyst estimates for GME. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 27.49% lower within the past month. GME is holding a Zacks Rank of #5 (Strong Sell) right now.

In terms of valuation, GME is currently trading at a Forward P/E ratio of 5.65. This valuation marks a discount compared to its industry's average Forward P/E of 12.96.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 233, which puts it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GME in the coming trading sessions, be sure to utilize Zacks.com.


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