GameStop (GME) Estimates Raised at Needham & Company on 'Broad' Q2 Beat

August 22, 2014 7:40 AM EDT
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Needham & Company analyst Sean McGowan reiterated a Buy rating and $55 price target on GameStop (NYSE: GME) while raising estimates following a broad Q2 beat.

McGowan commented, "2Q results beat expectations broadly, with sales, margins (gross and operating) and EPS all exceeding our estimates and showing exceptional YoY growth. As expected, new video game hardware rose sharply, but the strong growth in new software was more surprising. Gross margins were higher than expected in almost every product segment. Management’s guidance for 3Q, facing a difficult comparison, was quite encouraging, as was the affirmation of previous guidance, given that several AAA titles have shifted out of the fiscal year."

The firm is raising our EPS estimates by $0.10 in 2014, '15 and '16 to reflect better margin assumptions. FY 2015 EPS goes from $3.65 to $3.75 and FY 2016 EPS goes from $4.50 to $4.60.

For an analyst ratings summary and ratings history on GameStop click here. For more ratings news on GameStop click here.

Shares of GameStop closed at $40.49 yesterday.

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