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GameStop (GME) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, GameStop (GME) closed at $4.77, marking a +1.49% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.39%. Elsewhere, the Dow gained 1.11%, while the tech-heavy Nasdaq added 1.65%.

Prior to today's trading, shares of the video game retailer had gained 6.58% over the past month. This has lagged the Retail-Wholesale sector's gain of 22.43% and the S&P 500's gain of 25.31% in that time.

GME will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of -$0.63, down 1000% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.09 billion, down 29.47% from the prior-year quarter.

GME's full-year Zacks Consensus Estimates are calling for earnings of -$0.58 per share and revenue of $5.94 billion. These results would represent year-over-year changes of -363.64% and -8.1%, respectively.

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Investors might also notice recent changes to analyst estimates for GME. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 573.47% lower. GME is holding a Zacks Rank of #3 (Hold) right now.

The Retail - Consumer Electronics industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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