GameStop Underperforming Market: Analysts' Insights on Stock Performance

Strategic Insights -

GameStop Corp., a major video game retailer, is trailing the S&P 500's gains despite the video game industry's resilience during the economic downturn. Analysts at Zacks Equity Research suggest that market expectations regarding the industry's decline may be unwarranted, citing data from the NPD Group showing a soft April for video game sales. The decline in sales can be attributed to a weaker release schedule compared to the same period last year. Meanwhile, Anthracite Capital has received a credit facility extension until September 30th, 2020, providing the company with some breathing room.

Key Takeaways:

  • GameStop Corp. shares are underperforming the market, with a 14% gain versus the S&P 500's 33% rise from its March 9 low.
  • The company's sales are expected to increase this year, with earnings growth of 23% and 12% in 2010.
  • Recent data from the NPD Group show video game sales declined 8% in April compared to the same period last year.
  • Anthracite Capital has secured a credit facility extension until September 30th, 2020, eliminating mark-to-market provisions.
  • Analysts at Zacks Equity Research provide continuous coverage for a universe of 1,150 publicly traded stocks, with recommendations and target prices having a six-month time horizon.

Statistics:

  • S&P 500 index gain: 33%
  • GameStop Corp. shares gain: 14%
  • April video game sales decline: 8%
  • Video game sales in April 2008: $392 million
  • Video game sales in April 2009: $511 million
  • Year-on-year sales drop: 23%
  • Number of publicly traded stocks covered by Zacks Equity Research: 1,150
  • Six-month time horizon for recommendations and target prices: Yes

Sources:

  • NPD Group
  • Zacks Equity Research
  • Anthracite Capital (NYSE: AHR)
  • BlackRock (NYSE: BLK)
  • Microsoft (Nasdaq: MSFT)
  • Sony (NYSE: SNE)
  • GameStop Corp. (NYSE: GME)