GameStop Corporation Society of General Mechanical Engineers The company turned a profit despite lower revenue, sending its shares up 3% in pre-market trading on Wednesday. However, technical analysis of GME stock based on simple moving averages shows that it is oscillating within stated ranges.
What happened: GameStop’s net profit for the third quarter ended November 2 was $17.4 million, compared with a net loss of $3.1 million in the same period last year.
The company’s net sales for the quarter, based on GAAP measures, were $860 million, compared with net sales of $1.078 billion in last year’s third quarter.
Why it’s important: GameStop shares are up 61.6% so far this year, but have fallen 11.7% over the past six months. By comparison, the New York Stock Exchange Composite Index’s performance during the same period was 18.1% and 11%, respectively.
The company, which is also part of the Russell 2000, has outperformed the index so far this year, growing 18.4%. Over the past six months, however, GME stock has underperformed R2K, which has gained 17.7% in that period.
From a technical perspective, daily moving average analysis indicates a potential period of consolidation.
GameStop shares closed at $26.93 per share on Tuesday and rose to $27.75 per share after hours. This is below its 8-day and 20-day simple moving averages ($27.92 and $27.98 respectively). Its shares are currently trading above its 50-day and 200-day moving averages of $24.34 and $21.30, respectively, according to Benzinga Pro.
This trend suggests the stock is experiencing near-term downward momentum, but is still significantly above its longer-term price trend, suggesting the stock is consolidating. On the other hand, a RSI of 50.42 suggests the stock is in neutral territory and is neither overbought nor oversold.
Benzinga’s Technical Analysis Scorecard gave the company a score of 33 out of 100, indicating poor momentum.
See Also: SoFi Stock Falls After Bank of America Downgrades on Valuation Concerns: Here’s What Technical Analysis Shows
What analysts say: The consensus price target for GameStop, based on ratings from two analysts, is $16.5 per share, according to Benzinga Pro. Ascendiant Capital has a price target of $23 per share as of December 27, 2021.
The average price target between Wedbush’s three latest ratings is $9.33, which implies a 66.37% downside for GameStop.
Read next:
Photo credit: Shutterstock
Market news and data brought to you by Benzinga API
© 2024 Benzinga.com. Benzinga does not provide investment advice. all rights reserved.
