By Senad Karaahmetovic
GameStop (NYSE:GME) reported lower-than-expected revenue for its third quarter. The video game retailer saw its revenue drop 8.5% year-over-year to $1.19 billion, a big miss compared to the $1.35B analyst estimate.
GME stock is up over 1% in pre-open Thursday.
The company also reported a Q3 loss per share of $0.31, again worse than the consensus for a loss per share of $0.28.
In response to the latest earnings report, Wedbush analysts cut the price target to $5.30 per share from $6 as the company’s turnaround plan “has proven fruitless so far.”
“Short-term headwinds include poor results for its NFT marketplace, a contraction of the broader NFT space, ongoing hardware constraints, and cash burn. Long-term headwinds include liquidity challenges and an industry wide shift towards digital downloads,” the analysts explained in a client note.
Their new target implies a downside risk of over 75% relative to yesterday’s closing price.
GameStop stock closed at $22.26 yesterday, nearly 5% lower on the day.