Healthy Upside Potential: GameStop Corp. (GME)

GameStop Corp. (NYSE: GME) stock jumped 2.99% on Friday to $19.61 against a previous-day closing price of $19.04. With 3.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 5.15 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $20.07 whereas the lowest price it dropped to was $18.90. The 52-week range on GME shows that it touched its highest point at $49.85 and its lowest point at $15.41 during that stretch. It currently has a 1-year price target of $12.65. Beta for the stock currently stands at -0.10.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GME was down-trending over the past week, with a drop of -4.94%, but this was down by -1.56% over a month. Three-month performance dropped to -20.09% while six-month performance fell -48.89%. The stock lost -26.40% in the past year, while it has gained 6.23% so far this year. A look at the trailing 12-month EPS for GME yields -1.68 with Next year EPS estimates of -0.59. For the next quarter, that number is -0.13. This implies an EPS growth rate of -59.10% for this year and 55.00% for next year.

Float and Shares Shorts:

At present, 304.20 million GME shares are outstanding with a float of 256.96 million shares on hand for trading. On Oct 13, 2022, short shares totaled 53.88 million, which was 17.69% higher than short shares on Sep 14, 2022. In addition to Mr. Matthew Furlong as the firm’s Pres, CEO & Director, Ms. Diana Saadeh-Jajeh serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 27.25% of GME’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 7.07% of GME, in contrast to 3.48% held by mutual funds. Shares owned by individuals account for 18.76%. As the largest shareholder in GME with 7.82% of the stake, The Vanguard Group, Inc. holds 23,830,749 shares worth 23,830,749. A second-largest stockholder of GME, BlackRock Fund Advisors, holds 19,371,975 shares, controlling over 6.36% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in GME, holding 6,928,945 shares or 2.28% stake. With a 2.59% stake in GME, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 7,873,183 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.56% of GME stock, is the second-largest Mutual Fund holder. It holds 7,798,130 shares valued at 143.95 million. Vanguard Small Cap Index Fund holds 2.19% of the stake in GME, owning 6,671,551 shares worth 123.16 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GME since 3 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With GME analysts setting a high price target of $20.00 and a low target of $5.00, the average target price over the next 12 months is $10.10. Based on these targets, GME could surge 1.99% to reach the target high and fall by -74.5% to reach the target low. Reaching the average price target will result in a decline of -48.5% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. GME will report FY 2023 earnings on 03/22/2023. Analysts have provided yearly estimates in a range of -$1.27 being high and -$1.36 being low. For GME, this leads to a yearly average estimate of -$1.31. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. GameStop Corp. surprised analysts by -$0.03 when it reported -$0.31 EPS against a consensus estimate of -$0.28. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is -$0.09 and the low estimate is -$0.18. The average estimate for the next quarter is thus -$0.13.

Summary of Insider Activity:

Insiders traded GME stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 23 while that of sell transactions has risen to 4 over the past year. The total number of shares bought during that period was 401,923 while 3,914 shares were sold.

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