While the holidays are typically a lucrative time of year, especially for those within the gaming industry, GameStop’s (NYSE:GME) holiday sales report this morning seems to be disappointing investors quite a bit. Shares are down substantially in early morening trading, even as the company reported a comparable store sales increase 4.4% toal or 4.9% in the U.S. and 3.2% Internationally. These figures represent the nine-week holiday period which ended on January 2, 2016.
“We are pleased with our holiday sales performance,” explained Paul Raines, chief executive officer. “Our positive comps were fueled by strong sales of new video game consoles and collectibles. Growth in our diversification efforts, Tech Brands and collectibles, more than offset a decline in new software sales in terms of revenues and gross margin dollars. Based on these results, we are updating our fourth quarter and full year earnings per share guidance. It is exciting to see our transformation strategy paying off with our new businesses meaningfully contributing to the company’s sales and profitability.”
Today’s selloff of GameStop Corp. (NYSE:GME) shares comes a day after the stock rallied into the close. The stock has fallen 8.78% or $2.53 following this negative news, hitting $26.77 per share. Approximately 334,502 shares traded hands. GME shares have declined 31.75% since June 8, 2015 and are currently downtrending. It has underperformed the S&P500 by 27.06%.
From a total of 14 analysts covering GameStop Corp. (NYSE:GME) stock, 7 rate it a “Buy”, 1 a “Sell”, and 6 a “Hold”. This means that 50% of the ratings are positive. The highest target price is $60 while the lowest target price is $28.87. The mean of all analyst targets is $45.53 which is 63.48% above today’s ($27.85) stock price. GameStop Corp. was the topic of 29 analyst reports since August 6, 2015 according to the firm StockzIntelligence Inc. Sterne Agee CRT downgraded shares on January 4 to a “Neutral” rating. Zacks upgraded shares to a”Hold” rating and a $53 target share price in their report from an August 17. Bank of America downgraded GME stock in a recent report from November 24 to a “Neutral” rating. Finally, Oppenheimer downgraded the stock to a “Perform” rating in a report they issued on a November 24.
The institutional sentiment increased to 1.13 in Q2 2015. It’s up 0.16, from 0.97 in 2015Q2. The ratio improved, as 42 funds sold all their GameStop Corp. shares they owned while 148 reduced their positions. 68 funds bought stakes while 147 increased their total positions. Institutions now own 146.48 million shares which is 7.28% more than the previous share count of 136.54 million in 2015Q2.
Robotti Robert holds 4.58% of its total portfolio in GameStop Corp., equating to 166,820 shares. Permit Capital Llc owns 154,997 shares representing 4.29% of their total US portfolio. Moreover, Stelliam Investment Management Lp has 2.87% of their total portfolio invested in the company, equating to 2.80 million shares. The Pennsylvania-based S&T Bank Pa has a total of 2.44% of their portfolio invested in the stock. Paradice Investment Management Llc, a Colorado-based fund reported 322,670 shares owned.
GameStop Corp. is a multichannel video game, consumer electronics and wireless services retailer. The company has a market cap of $2.91 billion. The Firm operates its business in four Video Game Brands divisions: United States, Canada, Australia and Europe, and a Technology Brands segment. It has 7.59 P/E ratio. The Video Game Brands divisions include 6,206 stores, 4,138 of which are included in the United States segment.