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

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GameStop (GME - Free Report) closed the latest trading day at $26.01, indicating a -0.12% change from the previous session's end. This move lagged the S&P 500's daily gain of 0.44%. On the other hand, the Dow registered a gain of 0.7%, and the technology-centric Nasdaq increased by 0.27%.

Heading into today, shares of the video game retailer had gained 11.33% over the past month, lagging the Consumer Discretionary sector's gain of 13.89% and outpacing the S&P 500's gain of 10.62% in that time.

Investors will be eagerly watching for the performance of GameStop in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.08, showcasing a 166.67% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $750 million, down 14.95% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $0.47 per share and a revenue of $3.4 billion, demonstrating changes of +42.42% and -11.06%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for GameStop. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

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. Over the past month, there's been no change in the Zacks Consensus EPS estimate. GameStop is currently a Zacks Rank #1 (Strong Buy).

Investors should also note GameStop's current valuation metrics, including its Forward P/E ratio of 55.4. This represents a premium compared to its industry's average Forward P/E of 16.72.

The Gaming industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 139, placing it within the bottom 44% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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