
GameStop (GME) Stock Gets Going, Could Rise 25%
NEW YORK (TheStreet) -- Gamestop (GME) - Get Report looks poised for further gains, as the charts suggest an upside breakout soon.
Unlike many stocks this summer, GME did not suffer a big decline in August. Prices moved down about $6 to $7 over a two-month period, and the On-Balance-Volume (OBV) line hardly budged, suggesting that many of the people who held GME stayed with those positions. The 50-day and 200-day moving averages are also in a positive configuration, with the 50-day above the rising 200-day.
In this second chart of GME, above, we can see how rallies above $47 to $48 have run out of steam the past two years. With the improved short-term picture for GME in the first chart, above, we would go long GME with a close above $48 and then use a sell stop below $45 if prices suddenly retreat. Taking the height of this long consolidation and adding it to the breakout gives us $56 as an upside price target. Game on!
Separately, TheStreet Ratings team rates GAMESTOP CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate GAMESTOP CORP (GME) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GAMESTOP CORP has improved earnings per share by 9.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GAMESTOP CORP increased its bottom line by earning $3.54 versus $3.02 in the prior year. This year, the market expects an improvement in earnings ($3.91 versus $3.54).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 2.8% when compared to the same quarter one year prior, going from $24.60 million to $25.30 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- You can view the full analysis from the report here: GME











