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GameStop's Stock Price Is Still 'Very Detached From Fundamentals'

Benzinga2021-03-15

Shares of GameStop Corp. (NYSE: GME) remain "very detached from fundamentals" and the latest data from NPD isn't offering any support for the stock.

The GameStop Analyst: Curtis Nagle maintains an Underperform rating on GameStop's stock with a $10 price target.

The GameStop Thesis: Data from NPD shows that the total number of physical game units sold for new PlayStation and Xbox consoles are "very underwhelming," Nagle wrote in a note. In fact, for every PS5 and Xbox Series X/S console sold since their launch, only 0.64 physical games were sold in February.

While part of the underperformance could be attributed to the lack of any new major game release in February, Nagle said part of the poor physical game sales could be attributed to rising digital penetration. Video game maker Electronic Arts Inc. (NASDAQ: EA) acknowledged this reality in its conference call when it said digital accounted for 62% of sales.

Related Link: Rod Alzmann Breaks Down The 'Chewy-fication' Of GameStop

Meanwhile, GameStop's surge is in part attributed to rising expectations for GameStop to adopt a digital business model led by Ryan Cohen. How GameStop can find relevance in the online video game market is somewhat unclear.

"While Cohen no doubt brings much-needed expertise to GMEs go-forward strategy, we still do not see how it addresses the issue of GME's software businesses migrating to online networks where GME plays an extremely limited role as an intermediary," the analyst wrote.

GME Price Action: Shares of GameStop were trading higher by nearly 10% at $280.73.

Latest Ratings for GME

Date Firm Action From To
Jan 2021 B of A Securities Maintains Underperform
Jan 2021 Telsey Advisory Group Downgrades Outperform Underperform
Oct 2020 Jefferies Downgrades Buy Hold

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment24

  • GameTop
    ·2021-03-16
    $遊戲驛站(GME)$Really? But I don't care ! Keep Buying &SHolding ,Nothing else ,Just like this stock !??$AMC院線(AMC)$$特斯拉(TSLA)$
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  • GameTop
    ·2021-03-16
    Really? But I don't care ! Keep Buying &SHolding ,Nothing else ,Just like this stock !??
    Reply
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  • T2021073008
    ·2021-03-15
    Support
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  • Ahjennn
    ·2021-03-15
    Lol
    Reply
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  • Mrkew
    ·2021-03-15
    Rocket up peeps
    Reply
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  • kenong62
    ·2021-03-15
    You cannot undetached from reddit
    Reply
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  • lihodinho
    ·2021-03-15
    I love gamestop!!!
    Reply
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  • ZEROHERO
    ·2021-03-15
    Gambling stock
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  • Marksman_SG
    ·2021-03-15
    Sold mine 
    Reply
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    • RicPuah
      Nice
      2021-03-15
      Reply
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  • riphunter
    ·2021-03-15
    GME
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  • Jakielwj
    ·2021-03-15
    Pls like and comment thanks
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    • Vern88
      Good
      2021-03-15
      Reply
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  • Wastefood
    ·2021-03-15
    Its gonna crash! FUNDAMENTAL is not there!
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    • Vern88
      Yup
      2021-03-15
      Reply
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  • Ralfy
    ·2021-03-15
    Hold
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  • VictorLi
    ·2021-03-15
    Great
    Reply
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  • Derrickcdh
    ·2021-03-15
    Appreciate like and comment
    Reply
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  • chunzzz
    ·2021-03-15
    Like and comment plz 
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    • BoonP
      done
      2021-03-15
      Reply
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    • Kingkong1234
      Done
      2021-03-15
      Reply
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  • Derrickcdh
    ·2021-03-15
    No shit
    Reply
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  • CrissX
    ·2021-03-15
    Good
    Reply
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  • HODL
    Reply
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  • Diamondhand6
    ·2021-03-15
    WSB
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