Is GME stock topping out? Or could it see another breakout? I am going with the latter.
Is Gamestop (NYSE:GME) an outdated model in need of a complete overhaul, or a stalled machine requiring nothing more drastic than a reboot?
The current price-earnings ratio (P / E) of Gamestop is 7.7. Compared to values from the “Specialty Retail” sector (P / E ratio of 35.46), the share is below the average (approx. 78 percent). From the point of view of fundamental criteria, Gamestop is undervalued and consequently receives a “Buy” rating at this level even though the price went up more than 100% due to a couple of strong catalysts.
Both Sony and Microsoft launched their newest consoles with the option of physical discs through Gamestop , implying there will be demand for physical software as well at GameStop stores.
Social media dislikes GME stock
In addition to hard factors such as balance sheet data, share prices can also be assessed using soft factors such as mood. Our analysts looked at Gamestop on social platforms and measured that the comments and findings were predominantly negative. In addition, the users of social media around Gamestop have mainly taken up negative topics in the past weeks. This means that the share is rated “Sell” for this analysis. The editorial team has come to the conclusion that Gamestop has to be classified as a “sell” in terms of mood.
Gaming is hot right now
In the previous 200 trading days, the average closing price for the Gamestop share was $4.8. The closing price on the last trading day was USD 9.47 (+97.29 percent difference) and we are therefore assigning a “Buy” rating from a technical chart point of view. In addition to the 200-day average, the 50-day average is also often analyzed using the chart technique. For this the last closing price is also above the moving average . The Gamestop share is thus given a “Buy” rating on this shorter-term basis. Gamestop receives a “Buy” rating overall for the simple chart technique.
If they get more consistent financial results and improve the P/E, which is at a discount to its competitors, the stock could move to the mid-20s.