Dallas, Texas 11/25/2013 (Financialstrend) – The S&P 500 index tracked games console and electronic goods seller GameStop Corp. (NYSE:GME) has offered conservative and downsized estimations for its fourth quarter and next fiscal operations. This relative weakness in its market estimation by the $5.88 billion market capped firm was in spite of Microsoft reporting more than 1 million units of its latest gaming device sensation Xbox One since it was launched last week.
Mixed Operational Results
The relative subdued outlook by GameStop Corp. (NYSE:GME) is being ascribed to the weak fundamentals that the firm has been suffering form over the past few quarters. In the trailing 12 months it has generated net loss of $298 million from sales of $8.5 billion in the same period. In spite of its continued struggle to regain market share and increasing its quarterly sales, the seller of electronic games has managed to post dividend yield of 2.21%. This effort on part of management to keep its investors happy has to been seen in context to the close to 11.8% dip in its market value last week and by 4.2% in the past 30 days.
Analysts More Positive
It seems ironical that rating agencies are more bullish about the prospects of this firm in comparison to company executives. Rating agency Needham has upgraded the stock to a Buy as against its previous Hold recommendation of the stock. It has also upped the price target for this retailer of games to $60 as against a selling price of $49.86 as of close of business last week. This translates to a 20.3% premium on November 22 closing price. Analysts have pointed out that the larger than expected demand for Microsoft’s Xbox One and the likeliness of Xbox One getting sold out during the ensuing holiday season as one of the prime reasons for the upgrade. They have also pointed out that with Microsoft pushing ahead with its flag ship gaming device, it’s a matter of time before Sony Corp will up its game to garner larger market share for its own gaming device PS4.