GameStop (GME) Should Rebound on XBox One Confusion - Needham & Company

May 22, 2013 8:25 AM EDT
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Price: $23.34 +2.68%

Rating Summary:
    12 Buy, 10 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Needham & Company analyst Sean McGowan commented on Hold-rated GameStop (NYSE: GME) following yesterday's 5% sell-off on the Microsoft's unveiling of XBox One (XNO).

McGowan believe GME dropped "because certain technical aspects of XNO suggest that it may harder for consumers to play used games on the system than has been the case on prior platforms."

However, the analyst said information is not clear at this point and they expect the shares of GME to rebound. "While we agree that the details released yesterday could be interpreted as an indication that used games will be harder to play, information provided by Microsoft is not clear on this point," the analyst notes. "It is our view that GME shares may rebound in the near-term as investors parse information from the launch and infer that on balance, a successful launch
of XBO is positive."

That said, the analyst continues to have concerns (independent of the features of new consoles) over how well GME's used business will hold up over time.

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 $36.78 yesterday.

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