Wall Street sets GameStop (GME) stock price for the next 12 months

After struggling with falling sales, problems with inventory, and tight cash flow, video game retailer GameStop announced on March 21 that it had turned a quarterly profit for the first time in two years, marking the end of its fiscal year on a positive note.

In the last month, GME has been trading in the $15.53 – $21.19 range, but during the after-hours trading session, the company’s stock rose by more than 45%, and at the time of publication, GME stock was up 39.38% during premarket trading +$6.95 to change hands at $24.60.

The following two resistance levels for GME stock are $26.88 from a trend line in the weekly time frame and $27.60 from a horizontal line in the daily time frame, with volume considerably higher in the last couple of days.

Wall Street’s verdict on GME stock

GameStop has been assigned an overall ‘sell’ rating by the two analysts working on Wall Street. Significantly, one analyst recommended a ‘hold’ rating while another expert advocated a ‘strong sell’ based on GME stock’s performance over the last three months.

The average price projection for GME stock over the last three months is $12.65; this objective represents a -28.33% downside from its current price. It’s interesting to note that the maximum price forecast for the next year is $20, less than what GameStop was trading at during premarket.

GME posts results

Net sales came in at $2.23 billion for the quarter that ended on January 28. This is a modest decrease from the $2.25 billion recorded for the fourth quarter of the previous fiscal year. The retailer reported a profit of $48.2 million, equivalent to 16 cents per share, in contrast to a loss of $147.5 million, equal to 49 cents in the previous year. 

The retailer had been working hard to return to being profitable, and one of the ways they did this was by reducing their operating expenses. The selling, general, and administrative expenditures for the quarter were $453.4 million, which is equivalent to 20.4% of sales. This figure is lower than the $538.9 million, or 23.9% of sales, recorded for the same period a year earlier.

As part of GameStop’s goal to revive its business, the company has also been working to boost its cash situation. This company has cash and cash equivalents of $1.39 billion at the end of the most recent quarter. 

The corporation has been focusing on developing its digital brand in parallel with managing the obligations associated with its traditional retail presence.

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