GameStop's (GME) Microsoft Deal Unlikely to Drive 'Meaningful' Upside - Wedbush
- Wall St ends lower as investors weigh fresh employment data
- U.S. private employers add 103,000 jobs in November - ADP
- Data storage group MongoDB delivers upbeat guidance after Q3 results top estimates
- Stocks slip, 10-year Treasury yield falls as rate cut timing weighed
- A major Wall Street bank is out with S&P 500 forecast for 2024
Wedbush analyst Michael Pachter reiterated a Neutral rating and $8.00 price target on GameStop (NYSE: GME), saying while the Microsoft deal is positive it will unlikely drive "meaningful" upside.
"The stock reaction appears to be driven specifically by language that suggests GameStop will participate in the “lifetime revenue value of each gamer”, but the revenue share dynamic is likely less material than the share move would imply," the analyst commented.
He added, "For example, if a customer signs up for the $15 monthly Xbox Game Pass Ultimate at a GameStop store, we would expect GameStop to receive $1.50 or so from that monthly revenue stream for as long as the customer continues to subscribe. If instead, the customer signs up for Xbox All Access for $35/month, GameStop would share $3.50 per month for 24 months."
Shares of GameStop closed at $13.49 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- GameStop (GME) call put ratio 2.8 calls to 1 put into quarter results and outlook
- GameStop (GME) Tops Q3 EPS by 8c
- GameStop Discloses Third Quarter 2023 Results
Create E-mail Alert Related CategoriesAnalyst Comments
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!