Piper Jaffray maintained an Overweight rating on GameStop (NYSE: GME), and cut the price target to $41.00 (from $42.00), following the company's 4Q earnings report. GME reported EPS of $2.40 on revenue of $3.53B (vs. consensus of $2.25 on $3.57B). New hardware was $822M up 2% vs. Street at $845.6M. New software was $1.15B, down 11% y/y vs. Street at $1.17B.

Analyst Michael Olson commented, "GameStop reported Q4 revenue essentially in-line with the pre-released range, while EPS was $0.15 above the revised outlook. Guidance for Q1 and 2016 is below consensus, with 2016 EPS outlook of $3.90-4.05, slightly under the Street, but this guidance does not include share repurchases (Street ests do). Results for Q4'15 were driven by stronger than anticipated sales of non-core related revenue streams (mobile & CE, collectibles, etc.), offset by ongoing weakness in New Software (-11% y/y). GameStop repurchased 1.6M shares in Q4 for $50M and expects to repurchase a significant amount in '16. The console cycle continues to have a strong trajectory with >40% faster uptake of new gen consoles vs. the first 10 quarters of the prior cycle, which is positive for GameStop and the publishers. GameStop, however, is clearly seeing some impact from increasing digital software sales. Maintain OW, but slightly lowering PT to $41."

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Shares of GameStop closed at $30.27 yesterday.