Will GameStop Stock Continue To Rebound?

white Xbox controller

GameStop (GME) is recovering from its multiyear, bear market due to the launch of the long-awaited next-generation video game consoles. As the company continues to shift sales online, shares are expected to continue gaining.

Headquartered in Grapevine, Texas, GameStop Corporation (Get Rating) is a digital-first omnichannel retailer, offering games and entertainment products. A Fortune 500 company, GME offers a wide variety of POP! vinyl figures, collectibles, board games, etc. Its global family of brands includes GameStop, EB Games, Micromania, ThinkGeek, and Game Informer magazine, the world’s leading print and digital video game publication.

The company started recovering this quarter with the unprecedented demand for video game consoles — Xbox Series X and S, and Sony PlayStation 5 and Sony PlayStation 5 Digital Edition — that was launched in November. GME also continued to transform its physical store presence to online stores to reduce operating costs. Moreover, the company’s investment in its web properties, and the mobile app seems to have paid off as GME witnessed an increase in its global e-commerce sales.

The company expects much better results for the current quarter ending January 2021, as the comparable store sales increased for November. The stock has gained 266.7% over the past year to close yesterday’s trading session at $20.57, after hitting its all-time high of $22.35. This impressive performance and the potential upside based on several factors have helped the stock earn a “Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates GME:

Trade Grade: A

GME is currently trading above its 50-day and 200-day moving averages of $14.07 and $8.80, respectively, indicating an uptrend. Moreover, GME has gained 48% over the past month, reflecting a solid short-term bullishness.

For the third quarter ended October 2020, the company’s net sales climbed 6.7% sequentially to $1 billion. Gross profit increased by 9.6% sequentially to $276.3 million. Global e-commerce sales, representing over 18% of net sales, increased 257% year-over-year. GME’s comparable-store sales increased by 16.5% year-over-year for November 2020.

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Adam Reynolds 4 weeks ago Member's comment

Most certainly!