GameStop (GME) PT Lowered to $24 at Ascendiant Capital

Ascendiant Capital analyst Edward Woo lowered the price target on GameStop (NYSE: GME) to $24.00 (from $25.00) while maintaining a Sell rating nearly 3 weeks after the company reported earnings, showing results that were roughly in-line. Revenue was $1.18 billion (+26% y-o-y), compared to consensus of $1.12 billion. Pro forma EPS was $(0.76), compared with consensus of $(0.67). No Q2 guidance was offered, but the company stated that for May (first month of its current Q2), total sales increased ~27% y-o-y.

The analyst commented "Recent reports by video game publishers shows that digital revenue is increasing at a fast pace (~90% or more of publishers’ revenues). We remain very concerned about the long term prospects for GME’s core video game business once hardware sales temper as the installed base matures."

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