GameStop Corp. (NYSE:GME) stock rose by 3% in premarket hours on Wednesday as the company swung to profit despite a dip in its revenue. However, technical analysis of the GME stock based on simple moving averages shows that it is oscillating within a defined range.
What Happened: GameStop recorded a net income of $17.4 million for the third quarter that ended Nov. 2, compared to a net loss of $3.1 million in the same period last year.
The company's net sales were at $0.86 billion for the period, compared to $1.078 billion in the prior year's third quarter, according to the GAAP measures.
Why It Matters: GameStop stock has advanced by 61.6% on a year-to-date basis and declined 11.7% in the last six months. This compares to 18.1% and 11% performance by NYSE Composite in the same period, respectively.
The company, which is also a part of Russell 2000, outperformed the gauge on a year-to-date basis as it grew by 18.4%. However, over the past six months, GME stock underperformed R2K, which gained 17.7% during this period.
From a technical perspective, the analysis of daily moving averages indicates a potential period of consolidation.
GameStop stock closed at $26.93 apiece on Tuesday and rose to $27.75 per share in after hours. This is below its eight and 20-day simple moving averages, of $27.92 and $27.98, respectively. As per Benzinga Pro data, its current stock price is higher than the 50 and 200-day moving average prices at $24.34 and $21.30, respectively.
This trend indicates that the stock is experiencing near-term downward momentum but it is still broadly above its longer-term price movement, indicating consolidation. On the other hand, the relative strength index of 50.42 suggests the stock was in the neutral region, neither overbought nor oversold.
Benzinga's technical analysis scorecard, scores the company at 33 points out of 100, indicating poor momentum.
What Are Analysts Saying: According to Benzinga Pro data, GameStop has a consensus price target of $16.5 per share based on the ratings of two analysts. Ascendiant Capital's price target was $23 apiece as of Dec. 27, 2021. Wedbush's latest target from Sept. 11, 2024, stands at $10 per share.
The average price target of $9.33 apiece between the three latest ratings from Wedbush implies a 66.37% downside for GameStop.
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