GameStop Stock Forecast And Price Prediction (Updated October 2022)

Based on two Wall Street analysts who have given GameStop 12-month price targets in the previous three months. The average price estimate is $26.00, with a high of $26.00 and a low of $26.00 anticipated. The average price forecast reflects a 1.92% increase over the previous price of $25.51.

Gamestop (NYSE: GME) now has 304,529,721 shares in circulation. With Gamestop stock trading at $26.87 per share, the total market capitalization of Gamestop stock is $8.18B.

As of October 26, 2022, the market capitalization of Gamestop (NYSE: GME) is $8.18 billion. The market capitalization of Gamestop is determined by multiplying GME’s current stock price of $26.87 by GME’s total outstanding shares of 304,529,721.

Regarding GameStop stock (GME), what should our expectations be for the fourth quarter?

Inflation, rising interest rates, and other macroeconomic headwinds erode investor confidence. GameStop (NYSE: GME) is suffering these same headwinds like every other asset. In January 2021, GameStop (NYSE: GME) was riding high and experiencing a “short squeeze” ride after taking the globe by storm.

The business was able to capitalize on the short squeeze rally and raise $1.1 billion during the second quarter of 2021, which aided in the company’s rescue; nevertheless, in 2022, GameStop’s balance sheet resilience is degrading quarter by quarter.

According to projections made by industry analysts, the company’s fourth-quarter revenues and profits per share are expected to fall to $1.39 billion and -$0.39, respectively. More drops are anticipated in the year 2023. Investors will pay careful attention to fundamentals even though the banking sector has had a solid start to Q4 earnings. That is because inflation is still high, and the Federal Reserve (Fed) aims to raise interest rates.

The GME diagram and accompanying analysis

GME share price has moved between $23.91 and $27.82 during the last month, while 80% of all stocks have performed better. Price action is still trading at a discount to all of the day’s moving averages, and it has dropped to a level in the bottom half of its range for the last 52 weeks. According to the technical analysis findings, a support line can be found at $24.04, and a resistance line can be found at $24.77.

Experts on Wall Street have given the company a “moderate sell,” The average price forecast for the next year is $26.00. That is a 5.95% increase from the current trading price of $24.54. Two Wall Street analysts keep an eye on the firm; one has a “hold” rating for the company, while the other has a “sell” rating.

Even though the underlying fundamentals of equities today seem terrible, GME’s underlying fundamentals have altered very little over the previous two years.

Investors looking at the long term should put their money elsewhere. On the other hand, a firm that still has active Reddit boards may see another run, but a high tolerance for risk is necessary to take part in a possible GME gain.

According to the Stock Forecast, Shares of Gamestop Will Resume Trading Again After the Company’s Four-for-one Stock Split.

As of Monday’s end of the business, all shareholders of record for GameStop were eligible to receive three bonus shares. Buyers of GameStop stock between Tuesday and Thursday will get their bonus shares directly from the seller on Friday.

On Thursday, GameStop stock finished at $153.47, which, after accounting for a split, equates to a price of $38.37 a share. Shares of GameStop were up Friday morning, up 1.6% to $38.99 in premarket trade.

Stock splits are like slicing the same pie into smaller pieces; they don’t alter anything about the underlying corporation.

Stocks that do split tend to outperform the market, so some investors buy in anticipation of a split. Since equities with high momentum are more likely to split than market laggards, this seems to result in the tail-wagging dog situation.

Stock in GameStop is up 3.7% this year, but it’s down 14.7% from last year. Compared to where it was at this time in 2021, the S&P 500SPX +0.03 percent is down about 16 percent this year.

Even after accounting for the split, the stock price would be much higher than where most experts projected GameStop would trade in 2020 and 2021. At the height of the epidemic, the stock was trading for less than $3 before Chewy’s (CHWY +2.99 percent) co-founder Ryan Cohen revealed a stake in August 2020. When he became a board member in January 2021, the stock saw a surge in demand from individual investors who had learned about it via Reddit suggestions. Those who had bet against the company were obliged to close their positions as the stock’s price surged, resulting in an extraordinary squeeze that crippled several hedge funds.

Stock in GameStop peaked at $347.51 before falling.

Cohen was promoted to chairman in June 2021, shortly after the corporation made many changes in its C-suite to include executives with expertise in online sales. Under Matt Furlong, the current CEO, the company’s leadership has been making significant investments to improve its situation.

GameStop has struggled for a long time as customers migrated away from buying physical discs to buying games online and as downloads. Now it’s putting a lot of stock in its broader product offerings, like PC parts and TVs. The company has also developed a marketplace for nonfungible tokens, which it thinks will better position GameStop for the future generation of gaming. Still, many doubt this would be enough to turn the company’s fortunes around.

In the spring, management announced its intention to split the stock, and in June, the permitted share count was increased from 300 million to one billion. This month, GameStop revealed the specifics of the separation.

However, there are still some subreddits where the firm is well-liked. Among consumers, there is hope that yet another massive increase is on the horizon. On the other hand, a disproportionate number of short sellers use borrowed shares to gamble on a further decrease in the stock price.

According to short-selling analytics firm S3 Partners, approximately 13.5 million pre-split shares, or 21.6 percent of shares available for trade, were recently sold short. According to S3 Partners director Matthew Unterman, while the number of shares shorted will alter following the split, the dollar amount will stay the same at $2.15 billion.

GameStop Pricing Prediction By Month

In June 2022, the weighted average target value per GameStop stock is $131. The favorable conditions for Meme stock will continue in Jun, with likely monthly volatility at 24.837 percent

Minimum price prediction: $105.91/Maximum price prediction: $140.90

In July 2022, the weighted average projected price per GameStop stock is $116.13. The negative dynamics of Meme stock in Jul will be dominant, with likely monthly volatility at 26.831 percent

Minimum price prediction: $99.76/ Maximum price prediction: $136.34

In August 2022, the weighted average target price per GameStop stock is $106.38. The negative dynamics of Meme stock in Aug will dominate, with likely monthly volatility at 29.495 percent.

Minimum price prediction: $84.68/ Maximum price prediction: $120.10

In September 2022, $85.31 is the weighted average target value per GameStop stock. However, Sep will see Meme stock suffer from negative dynamics. There is expected to be 23.401 percent volatility per month.

Minimum price prediction: $74.56/Maximum price prediction: $97.34

In October 2022, $60.49 is the GameStop stock forecast for Oct 2022. Unfortunately, October will see Meme stock suffer from negative dynamics. Monthly volatility of 26.015% is expected.

Minimum price prediction: $48.51/ Maximum price prediction: $65.57

In November 2022, GameStop’s stock forecast is 61.94. With potential monthly volatility of 26,949 percent, Nov will see bullish dynamics for Meme stock.

Pessimistic goal level: $53.39/ Maximum price prediction: $73.09

In December 2022, GameStop’s stock forecast is $71.97. The bullish Meme stock price dynamics will continue in Dec with likely monthly volatility of 31.743%

Minimum price prediction: $56.64 / Maximum price prediction: $82.99

Revenue and Profit Forecast for the Years 2023 and 2024

With an annual profit growth rate of N/A, GameStop falls short of outpacing the 7.37 percent forecasted growth rate of the US Specialty Retail sector but beat the 16.43 percent predicted annual profit growth rate of the US market. According to GameStop’s projections for 2022, they anticipate losing $381,300,000.

Two Wall Street experts have projected GME’s profits at an average loss of -$376,352,493, with the lowest loss anticipated for GME at -$574,071,145 and the most significant loss forecast for GME at -$178,633,840.

GME is expected to make -$229,017,744 in 2024, with the lowest projection at -$329,785,551 and the highest forecast at -$128,249,937.

As a result, GameStop’s 5.48 percent yearly revenue growth projection does not surpass the US Specialty Retail industry’s 9.13 percent average expected revenue growth rate or the US market’s 9.68 percent forecast revenue growth. This year, GameStop expects to earn $6,010,000,000,000 in revenue.

An average of $487,403,196,706 has been predicted by two Wall Street analysts for GME’s revenue in 2023; the low estimate is $486,464,223,955 and the high estimate is $488,342,169,456.

With the lowest revenue projection at $505,923,098,270 and the highest at $515,060,906,256, GME is expected to make $510,492,002,263 in sales in 2024.

GameStop ROA and EPS Forecast

ROA is expected to be -6.54 percent at GME, below the 14.99 percent average for the predicted US Specialty Retail industry. The average price objective for GME stock set by two Wall Street analysts is $26.50, with the highest price goal of $30.00 and the lowest price target of $23.00.

Wall Street analysts expect GameStop stock to decline to $26.50 by March 18, 2023. According to the GAMESTOP stock price projection, the current GME stock price of $114.70 has a potential downside of 76%.

The current EPS (earnings per share) for GameStop (NYSE: GME) is -$5.25. For 2023, experts expect GME’s earnings per share (EPS) to be -$4.93, with the lowest estimate of -$7.52 and the highest estimate of $2.34. GME’s earnings per share (EPS) are predicted to be -$3.00 in 2024 (minimum: -$4.32; maximum: -$1.68).

That is consistent with the (NYSE: GME) expected ROE of -14.29 percent.

GME Stock Price Forecast Vs Momentum

On March 21, 2022, GME announced the results of its most recent quarterly report. Analysts had expected earnings per share (EPS) to be $0.78 in 2022 and $0.82 in 2023, with EPS growing year-over-year at -$1.77 and -$0.82, respectively. The EPS growth of 17.30% and 53.70% are natural in these numbers for the two years in question.

This year’s sales forecast is US$ 2.25 billion, with a variation of US$ 2.15% to 2.38%. Sales growth in the current quarter is expected to be 6.10% lower than in the same period last year.

Gamestop President Ryan Cohen has increased his stake in the company to around 12% with the acquisition of 100,000 shares. An increase in GME’s share prices was a result of this action.

Gamestop employed Loopring’s Layer 2 technology to build an NFT marketplace. The low cost of gas and the high degree of safety will benefit end-users. Due to its status as a popular Reddit meme stock, Gamestop has seen its share price soar.

In a press release, Gamestop said it would be separating its shares. They are seeking shareholder approval to increase the number of Class A common shares from 300 million to 1 billion. GME shares plummeted immediately after the stock split was announced.

There is a good chance that the stock split will be discussed at the annual shareholders’ meeting in June.

Hedge Fund that Lost Billions Due to Surge in GameStop Stock Surges Shuts Down

GameStop stock price witnessed a massive surge in 2021 following the subreddit’s stonk memes. As it happens in such cases, it results in enormous gains (and losses) for many individuals and firms. Melvin Capital lost the most in this havoc as it was fully invested in GameStop’s short position (along with several other stocks). As people no longer seemed interested in brick-and-mortar retail, Melvin Capital had bet that GameStop’s share would sharply fall. 

But the opposite happened.

At one point in January 2021, GameStop’s stock surged upwards by nearly 2400%, resulting in a loss of 53% of Melvin Capital’s total of $12 billion. 

Melvin Capital struggled hard to keep going even after two hedge funds provided a bailout of $2.75 billion. However, it didn’t prove to be enough as, 17 months later, Melvin Capital finally announced its closure, the New York Times reports.

Gabe Plotkin, Melvin Capital’s CEO’s disgraceful fall has been the talk of the town for the past many months. Prior to this unfortunate event, Plotkin had the reputation of a successful portfolio manager and an accomplished Wall Street trader. 

The hedge fund he founded nearly a decade ago was also known for providing very healthy returns to a number of investors. But he was completely outmaneuvered by a few amateur investors brought together by their nostalgia for GameStop and love for dogs and cats.

On one hand, the story tells us the power of thousands of very small investors even if they are seen to be inexperienced and amateur. On the other hand, it also tells that memes need to be taken very seriously at times. 

Social media has changed the dynamics of the world and even the stock trade, which is otherwise a very serious business, needs to adapt to it.