Wedbush analysts has cut the price target of GameStop (NYSE: GME) stock to $5.30 per share following a lower-than-expected earnings report for the third quarter.
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Investing.com reported that GameStop posted a revenue of $1.19bn for Q3, which is lower than the $1.3bn analysts’ expected. 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 early 2021, GameStop stock price rose to as high as $97.71 amidst multiple trading breaks due to volatility.
The analysts attributed the reason for the cut in target price to the failure of the company to make headway with it’s turnaround plan.
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.”
The n target implie a downside risk of over 75% relative to Thursday’s closing price of $22.26.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur