GameStop Stock Analysis: Q3 Results Provide Little Relief For Struggling Meme Stock Investors
GameStop Corp (NYSE:GME) shares are trading lower on Wednesday on the heels of the video game retailer’s third-quarter results. Here’s what you need to know.
- GameStop stock is feeling bearish pressure. What’s pressuring GME stock?
What To Know: GameStop reported third-quarter revenue of $821 million, below estimates of $987.28 million, while adjusted earnings of 24 cents per share topped expectations of 20 cents per share, per Benzinga Pro.
Total revenue was down around 4.5% on a year-over-year basis as hardware and accessories and software revenue declined compared to the prior year’s quarter. Collectibles revenue was the one bright spot, coming in at $256.1 million, up from $171.1 million in the same period last year.
GameStop also generated operating income of $41.3 million for the quarter, a notable improvement from an operating loss of $33.4 million in the third quarter of 2024.
The company closed the quarter with approximately $8.8 billion in cash and $519.4 million in Bitcoin (CRYPTO: BTC) after adding the crypto to its balance sheet earlier this year.
GME Analysis: GameStop is currently showing a mixed technical picture with the stock trading just above its 20-day simple moving average (SMA) but significantly below its longer-term moving averages. This positioning suggests that while there may be some short-term support, the overall trend remains weak as it struggles below the 50-day, 100-day, and 200-day SMAs.
The RSI is currently at 59.42, indicating a neutral momentum phase. This level suggests that the stock isn’t overbought or oversold, which means traders should watch for any shifts that could signal a stronger price movement in either direction.
MACD is above its signal line, indicating bullish momentum in the short term. This could suggest potential for upward price movement, but traders should remain cautious given the overall bearish trend indicated by the moving averages.
Key support is at $21.00, while resistance sits at $24.50. If the stock tests the support level and holds, it may provide a buying opportunity, but a break below could signal further declines, while a push through resistance could indicate a trend reversal.
In July, the death cross occurred when the 50-day SMA crossed below the 200-day SMA, signaling a significant shift to bearish sentiment. This crossover has contributed to the stock’s ongoing struggles.
Over the past 12 months, GME has seen a decline of 14.18%, reflecting ongoing challenges for the stock. Currently, GME is positioned near the lower end of its 52-week range.
Traders should keep a close eye on the support and resistance levels, as well as the momentum indicators, to gauge the stock’s next moves. The current technical setup indicates that while there may be short-term opportunities, the longer-term trend remains a concern.
GME Price Action: GameStop shares were down 5.45% trading at $21.85 at the time of publication Wednesday morning, according to Benzinga Pro.
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