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Why GameStop (GME) Dipped More Than Broader Market Today

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GameStop (GME - Free Report) closed at $20.54 in the latest trading session, marking a -1.86% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.92%. At the same time, the Dow lost 0.96%, and the tech-heavy Nasdaq lost 1.6%.

The the stock of video game retailer has fallen by 7.51% in the past month, lagging the Consumer Discretionary sector's gain of 3.47% and the S&P 500's gain of 2.68%.

Analysts and investors alike will be keeping a close eye on the performance of GameStop in its upcoming earnings disclosure. In the meantime, our current consensus estimate forecasts the revenue to be $900 million, indicating a 16.54% decline compared to the corresponding quarter of the prior year.

GME's full-year Zacks Consensus Estimates are calling for earnings of $0.01 per share and revenue of $4.03 billion. These results would represent year-over-year changes of -83.33% and -23.57%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for GameStop. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. GameStop is currently a Zacks Rank #3 (Hold).

Investors should also note GameStop's current valuation metrics, including its Forward P/E ratio of 2093. This denotes a premium relative to the industry's average Forward P/E of 20.79.

The Gaming industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 160, this industry ranks in the bottom 37% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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