NEW YORK (TheStreet) -- Shares of GameStop (GME) - Get Report were slumping 7.37% to $29.82 in early-morning trading on Friday as Baird reduced its stock price target to $40 from $42 following the company's lower-than-expected second-quarter sales.
After yesterday's market close, the Grapevine, TX-based video game retailer reported revenue of $1.63 billion, missing Wall Street's expectations of $1.72 million.
Noting GameStop's in-line earnings of 27 cents per share, Baird said it considers the mixed results a "buying opportunity," according to TheFly.
Baird added that the stock should benefit from improving seasonal trends, hardware launches and GameStop's recent AT&T (T) reseller acquisitions. The firm maintained its "outperform" rating.
Additionally, Piper Jaffray analysts said the retailer's revenue miss was due to a tough year-over-year comparison and that there were a few bright spots in its results, such as a 55% increase in its Tech Brands business.
The jump caused its total gross margin to rise by 5%, the firm said, TheFly reports.
Piper Jaffray maintained its "overweight" rating and $41 price target on the stock.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GAMESTOP CORP as a Buy with a ratings score of B-. This is driven by multiple strengths, 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 attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: GME