Analysts say GameStop stock may fall 75% after missing earnings consensus By Investing.com

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Analysts say GameStop stock may fall 75% after missing earnings consensus

Published Dec 08, 2022 09:02

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Analysts say GameStop stock may fall 75% after missing earnings consensus

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By Senad Karaahmetovic

GameStop (NYSE:GME) reported lower-than-expected revenue for its third quarter. The video game retailer saw its revenue drop 8.5% year-over-year to $1.19 billion, a big miss compared to the $1.35B analyst estimate.

GME stock is up over 1% in pre-open Thursday.

The company also reported a Q3 loss per share of $0.31, again worse than the consensus for a loss per share of $0.28.

In response to the latest earnings report, Wedbush analysts cut the price target to $5.30 per share from $6 as the company’s turnaround plan “has proven fruitless so far.”

“Short-term headwinds include poor results for its NFT marketplace, a contraction of the broader NFT space, ongoing hardware constraints, and cash burn. Long-term headwinds include liquidity challenges and an industry wide shift towards digital downloads,” the analysts explained in a client note.

Their new target implies a downside risk of over 75% relative to yesterday’s closing price.

GameStop stock closed at $22.26 yesterday, nearly 5% lower on the day.

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