GameStop Corp (NYSE:GME) shares are trading higher on Friday as the stock trends across social media platforms. The company is grabbing market attention following the announcement of a new compensation plan for CEO Ryan Cohen. Here’s what investors need to know.
- GameStop stock is showing downward pressure. What’s next for GME stock?
How Ryan Cohen’s Compensation Plan Could Transform GameStop
GameStop announced that its Board of Directors has granted Ryan Cohen a stock option award that will vest based on specific performance milestones. Cohen’s compensation could reach around $35 billion if the company meets both a market capitalization milestone of $100 billion and a cumulative EBITDA milestone of $10 billion.
The company has seen significant growth since Cohen joined the Board, with its market capitalization increasing from $1.3 billion to $9.3 billion, a rise of over 600%.
Additionally, GameStop’s financial health has improved, transitioning from a net loss of $381.3 million in fiscal 2021 to a net income of $421.8 million over the last four fiscal quarters.
Is GameStop’s Stock Facing A Momentum Crisis?
The stock is currently trading 1.2% below its 20-day simple moving average (SMA) and 6.7% below its 100-day SMA, indicating a bearish trend in the short to medium term. Over the past 12 months, shares have decreased by approximately 33.55%, and they are currently positioned closer to their 52-week lows than highs.
The RSI is at 48.95, which is considered neutral territory, suggesting no immediate overbought or oversold conditions. Meanwhile, MACD is below its signal line, indicating bearish pressure on the stock.
The combination of neutral RSI and bearish MACD suggests mixed momentum.
- Key Resistance: $24.50
- Key Support: $20.00
Analysts Predict Mixed Future For GameStop
Investors are looking ahead to the next earnings report on March 24.
- EPS Estimate: 31 cents (Up from 30 cents YoY)
- Revenue Estimate: $1.47 billion (Up from $1.28 billion YoY)
- Valuation: P/E of 24.3x (Indicates fair valuation)
Analyst Consensus & Recent Actions: The stock carries a Hold Rating with an average price target of $13.50. Recent analyst moves include:
- Wedbush: Underperform (Target $13.50)
Valuation Insight: While the stock trades at a fair P/E multiple, the consensus and 3% expected earnings growth suggest analysts view this growth as justification for the current valuation.
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for GameStop, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Weak (Score: 8.94/100) — Stock is underperforming the broader market.
- Value: Strong (Score: 72.11/100) — Trading at a fair valuation relative to peers.
- Growth: Bullish (Score: 96.21/100) — Strong growth potential indicated.
The Verdict: GameStop’s Benzinga Edge signal reveals a mixed outlook. While the Growth score indicates strong potential, the low Momentum score suggests that the stock is struggling to gain traction in the current market environment.
Top ETF Exposure
- VanEck Video Gaming and eSports ETF (NASDAQ:ESPO): 4.54% Weight
- AGF US Market Neutral Anti-Beta Fund ETF (NYSE:BTAL): 0.47% Weight
- SPDR S&P Retail ETF (NYSE:XRT): 1.54% Weight
Significance: Because GME carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
Price Action
GME Price Action: GameStop shares were down 0.96% at $21.21 at the time of publication on Friday, according to Benzinga Pro data.
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