GameStop (NYSE:GME) Shares Gap Up – Time to Buy?

GameStop Corp. (NYSE:GME) shares gapped up before the market opened on Monday . The stock had previously closed at $17.87, but opened at $18.75. GameStop shares last traded at $18.56, with a volume of 3,130,395 shares.

GameStop News Roundup

Here are the key news stories impacting GameStop this week:

• Positive Sentiment: GameStop expects second-quarter net income of approximately $290 million to $310 million, compared with $168.6 million a year earlier. The improvement appears largely linked to gains from its nearly $5 billion eBay equity position rather than stronger core retail sales. GameStop Expects Higher Profit Despite Lower Sales
• Positive Sentiment: GameStop held roughly $5 billion in cash and nearly $5 billion in eBay stock as of August 1. Investors may view the eBay stake as a potentially valuable digital-commerce asset and evidence that the failed acquisition effort still produced a strategic foothold. GameStop Turns eBay Pursuit Into a Nearly $5 Billion Investment
• Positive Sentiment: Amendments to the convertible-note exchange will settle approximately $358.4 million in cash instead of stock, reducing the immediate dilution overhang that had pressured GME. The cash payment does, however, reduce liquidity. Convertible Notes Exchange Amendment
• Neutral Sentiment: GameStop is expected to report its full second-quarter results on Tuesday, giving investors more detail on the eBay-related gains, cash position, operating expenses and management’s outlook. GameStop Expected to Release Earnings
• Negative Sentiment: Preliminary net sales are projected at $780 million to $800 million, down from $972 million last year. Planned store closures and GameStop’s exit from France are weighing on revenue, highlighting continued weakness in the core retail business. GameStop Expects Lower Quarterly Sales

Analysts Set New Price Targets

Several equities research analysts recently issued reports on the company. Wall Street Zen upgraded GameStop from a “hold” rating to a “buy” rating in a report on Sunday. Weiss Ratings restated a “hold (c)” rating on shares of GameStop in a research note on Wednesday, July 29th. One research analyst has rated the stock with a Hold rating, According to data from MarketBeat, the stock currently has a consensus rating of “Hold”.

GameStop Stock Up 1.9%

The company has a current ratio of 12.40, a quick ratio of 11.91 and a debt-to-equity ratio of 0.71. The firm has a market capitalization of $8.40 billion, a P/E ratio of 14.19 and a beta of 1.72. The stock’s 50-day simple moving average is $20.42 and its 200-day simple moving average is $22.19.

GameStop (NYSE:GME) last posted its earnings results on Tuesday, June 2nd. The company reported $0.30 EPS for the quarter, topping the consensus estimate of $0.16 by $0.14. GameStop had a net margin of 20.45% and a return on equity of 13.75%. The firm had revenue of $835.30 million for the quarter, compared to analysts’ expectations of $766.63 million. During the same quarter last year, the firm earned $0.17 EPS. The company’s quarterly revenue was up 14.0% compared to the same quarter last year.

Insider Buying and Selling

In other GameStop news, General Counsel Mark Haymond Robinson sold 3,957 shares of the business’s stock in a transaction on Monday, July 6th. The stock was sold at an average price of $22.62, for a total value of $89,507.34. Following the transaction, the general counsel owned 104,190 shares of the company’s stock, valued at approximately $2,356,777.80. The trade was a 3.66% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Daniel William Moore sold 7,085 shares of the company’s stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $22.38, for a total value of $158,562.30. Following the completion of the transaction, the insider owned 115,125 shares of the company’s stock, valued at $2,576,497.50. This trade represents a 5.80% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 18,125 shares of company stock valued at $406,587 over the last ninety days. 9.50% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On GameStop

A number of hedge funds and other institutional investors have recently made changes to their positions in GME. AQR Capital Management LLC grew its position in GameStop by 312.2% during the first quarter. AQR Capital Management LLC now owns 29,438 shares of the company’s stock valued at $623,000 after buying an additional 22,297 shares during the period. Goldman Sachs Group Inc. raised its position in GameStop by 33.2% in the first quarter. Goldman Sachs Group Inc. now owns 262,143 shares of the company’s stock worth $5,851,000 after acquiring an additional 65,325 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in GameStop by 9.2% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 1,131,481 shares of the company’s stock valued at $25,255,000 after acquiring an additional 94,892 shares during the last quarter. American Century Companies Inc. grew its position in shares of GameStop by 6.5% during the 2nd quarter. American Century Companies Inc. now owns 35,473 shares of the company’s stock valued at $865,000 after acquiring an additional 2,162 shares during the period. Finally, EverSource Wealth Advisors LLC grew its position in shares of GameStop by 226.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,277 shares of the company’s stock valued at $31,000 after acquiring an additional 886 shares during the period. 29.21% of the stock is owned by hedge funds and other institutional investors.

GameStop Company Profile

GameStop Corp. (NYSE:GME) is a global specialty retailer focused on video games, gaming consoles, consumer electronics and related accessories. The company operates a network of physical retail stores alongside an e-commerce platform, offering new and pre-owned products spanning the latest game software, hardware, collectibles and lifestyle merchandise. GameStop’s retail footprint is complemented by digital marketplaces for trade-ins and online purchases, as well as a membership program that provides exclusive content and rewards.

Originally founded in 1984 as Babbage’s in Dallas, Texas, the company adopted the GameStop name in 1999 following its merger with Software Etc.