Q1 Preview: NPD Data Suggests Strong Quarter for GameStop (GME); Mobile Apps May Weigh on Results
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Price: $18.12 +0.44%
Rating Summary:
3 Buy, 11 Hold, 8 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
3 Buy, 11 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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GameStop Corp. (NYSE: GME) may see some upside in a normally quiet first-quarter, as data from NPD suggests a late surge in video game sales during April.
NPD data showed that February saw a 3 percent increase in revs, a decline of 4 percent in March, and accelerating to a 21.9 percent gain in April. Further, NPD also noted the first fourth months of 2001 is seeing a 2.3 percent increase in total video game revs, on year-over-year comparison.
For its first-quarter, the Grapevine, TX-based retailer is expected to produce EPS of $0.54 and revs of $2.23 billion, representing earnings growth of 12.5 percent from EPS of $0.48 reported for the same period last year, and right in-line with its own prediction for EPS of $0.53 - $0.55. Last quarter, GameStop reported an EPS of $1.56 on revenues of $3.69 billion, mixed to consensus EPS of $1.56 and revs of $3.71 billion.
Of course, one can't leave out the possible erosion of gaming purchases as apps for mobile devices, such as Apple's (Nasdaq: AAPL) iPhone/iPod/iPad and Google (Nasdaq: GOOG) Android-based devices, continue to gain traction. Some investors will be curious to know how GameStop plans to address this issue or adjust product mix moving forward. Additionally, Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY), among others, have stepped-up their efforts in the gaming industry to lure shoppers in, though promotions may be less prominent in the first quarter.
Data from Bloomberg shows that analysts are more bullish on the shares, though not overly so: 11 analysts rate GameStop a Buy, 6 at Hold, and 1 a Sell. The average price target on the Street is $28, with a high of $33 and low of $17. GameStop shares have traded in a range of $27.69 to $17.70 over the last 52-weeks.
Analyst Commentary
Goldman Sachs notes that they see some upside to their estimates based on April NPD data. The firm is currently looking for EPS of $0.55 and revenues of $2.229 billion. Goldman sees 2 percent or better of software comps versus industry software sales being down 3 percent.
Goldman is Neutral heading into earnings.
Wedbush sees EPS of $0.56, revs of $2.24 billion, and comps below their 6 percent estimate (somewhere around 2 - 3 percent). The firm is moderately bullish moving forward, seeing upside fr GameStop with console and software price cuts, though those aren't expected until later this year.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of the release.
NPD data showed that February saw a 3 percent increase in revs, a decline of 4 percent in March, and accelerating to a 21.9 percent gain in April. Further, NPD also noted the first fourth months of 2001 is seeing a 2.3 percent increase in total video game revs, on year-over-year comparison.
For its first-quarter, the Grapevine, TX-based retailer is expected to produce EPS of $0.54 and revs of $2.23 billion, representing earnings growth of 12.5 percent from EPS of $0.48 reported for the same period last year, and right in-line with its own prediction for EPS of $0.53 - $0.55. Last quarter, GameStop reported an EPS of $1.56 on revenues of $3.69 billion, mixed to consensus EPS of $1.56 and revs of $3.71 billion.
Of course, one can't leave out the possible erosion of gaming purchases as apps for mobile devices, such as Apple's (Nasdaq: AAPL) iPhone/iPod/iPad and Google (Nasdaq: GOOG) Android-based devices, continue to gain traction. Some investors will be curious to know how GameStop plans to address this issue or adjust product mix moving forward. Additionally, Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY), among others, have stepped-up their efforts in the gaming industry to lure shoppers in, though promotions may be less prominent in the first quarter.
Data from Bloomberg shows that analysts are more bullish on the shares, though not overly so: 11 analysts rate GameStop a Buy, 6 at Hold, and 1 a Sell. The average price target on the Street is $28, with a high of $33 and low of $17. GameStop shares have traded in a range of $27.69 to $17.70 over the last 52-weeks.
Analyst Commentary
Goldman Sachs notes that they see some upside to their estimates based on April NPD data. The firm is currently looking for EPS of $0.55 and revenues of $2.229 billion. Goldman sees 2 percent or better of software comps versus industry software sales being down 3 percent.
Goldman is Neutral heading into earnings.
Wedbush sees EPS of $0.56, revs of $2.24 billion, and comps below their 6 percent estimate (somewhere around 2 - 3 percent). The firm is moderately bullish moving forward, seeing upside fr GameStop with console and software price cuts, though those aren't expected until later this year.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of the release.
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