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GME

GameStop

$19.06

-2.72 (-12.49%)

, NTDOY

Nintendo

12:00
08/25/17
08/25
12:00
08/25/17
12:00

GameStop slips after earnings miss despite assurances for 'better' second half

Shares of GameStop (GME) plunged after the video game retailer reported second quarter results, with adjusted earnings for the quarter falling short of consensus estimates. The company also noted a decline in U.S. comparable store sales in the quarter as well as a dip in new software sales and pre-owned sales. WHAT'S NEW: After the market close yesterday, GameStop reported Q2 adjusted EPS of 15c on revenue of $1.69B, compared to analysts' forecasts of 16c and $1.64B, respectively. Comparable store sales grew 1.9% in Q2, with U.S. SSS falling 1.4% and international SSS growing 9.8%. New hardware sales in Q2 grew 14.8%, led by continued demand for the Nintendo Switch (NTDOY), though new software sales and pre-owned sales fell 3.4% and 7.5%, respectively, impacted by lagging Xbox One (MSFT) sales. The company also said that digital sales grew 28.1% and collectibles sales increased 36.1% in the quarter. Looking ahead, GameStop reaffirmed its fiscal 2017 EPS guidance of $3.10-$3.40 and sees FY17 SSS to be at the high end of its previously stated guidance range of (5%)-0%. Analysts expect the company to report FY17 EPS of $3.31. CEO BULLISH ON BACK HALF: On the company's earnings call, GameStop chief executive officer Paul Raines said that he sees "better" results for the retailer in the second half of the year, driven by continued Switch demand and the launch of the Xbox One X. In an interview on CNBC today, Raines said that the strength of the Nintendo Switch shows there's still a place for console gaming and added that there's "tremendous demand" for future Switch products. STREET RESEARCH: Following the quarterly report, SunTrust analyst David Magee maintained a Buy rating on GameStop and said he would "downplay" the importance of the EPS miss, noting that various categories performed "roughly as expected." The analyst added that Q2 is the retailer's weakest quarter from a seasonal perspective and that the company should have a "strong" second half. In addition, Baird analyst Colin Sebastian backed his Outperform rating and $21 price target on GameStop, saying that Q2 results were in line with his expectations, though gross margins came in a bit light. Sebastian said that the stock should benefit from seasonal category strength, and the ongoing hardware ramp from the Switch and Xbox One X, improving pre-owned and tech brand trends. Wedbush analyst Michael Pachter also kept an Outperform rating on the stock, noting that the retailer has the highest market share of Switch hardware and software in the U.S. and in most of its international markets. On the other hand, Pachter said that the technology brands business underperformed relative to his expectations yet again, and that the uncertainty over how successful the Xbox One X launch will be as well as a "tepid" debut for the PS4 Pro (SNE) could put pressure on physical software sales later this year, which have generally disappointed in recent years due to the growth of digital spending. PRICE ACTION: At midday, shares of GameStop (GME) slipped 12.7% to $19.01. OTHERS TO WATCH: Game makers Electronic Arts (EA), Activision Blizzard (ATVI), and Take-Two (TTWO) each fell a bit over 1% near noon.

GME

GameStop

$19.06

-2.72 (-12.49%)

NTDOY

Nintendo

MSFT

Microsoft

$72.69

-0.03 (-0.04%)

SNE

Sony

$38.62

0.43 (1.13%)

EA

Electronic Arts

$117.82

-0.36 (-0.30%)

ATVI

Activision Blizzard

$63.43

-0.58 (-0.91%)

TTWO

Take-Two

$95.25

0.85 (0.90%)

  • 05

    Sep

  • 05

    Sep

  • 07

    Sep

  • 12

    Sep

GME GameStop
$19.06

-2.72 (-12.49%)

08/21/17
PIPR
08/21/17
NO CHANGE
PIPR
Overweight
Piper says video game industry could be '100% digital' in six years or less
Piper Jaffray analyst Michael Olson said comments from video game publishers and others in the industry lead him to the "best guess" that all video game purchases will be digital in about 6 years, or possibly sooner if the market spikes to 100% more quickly after reaching "critical mass" in a few years. Game publishers, including Activision Blizzard (ATVI), Electronic Arts (EA) and Take-Two (TTWO), will benefit from margin expansion as the industry approaches 100% digital, added Olson, who keeps Overweight ratings on all three game makers' shares. Another company often cited as being impacted by the industry's move to digital game downloads is retailer GameStop (GME).
08/23/17
BARD
08/23/17
NO CHANGE
Target $24
BARD
Outperform
GameStop should report in-line Q2 results, says Baird
Baird analyst Colin Sebastian said third party data shows stable selling trends for software sales and positive momentum for the Nintendo Switch, which points toward in-line Q2 results for GameStop (GME). Adding that overall industry selling trends appear little changed since May, Sebastian maintained his Outperform rating and $24 price target on GameStop shares.
08/25/17
RHCO
08/25/17
NO CHANGE
RHCO
GameStop Q2 EPS miss unimportant, says SunTrust
SunTrust analyst David Magee says he "would downplay" Gamestop's Q2 EPS miss, as he notes that Q2 is the company's weakest quarter from a seasonal perspective. The analyst thinks that the company will report "strong" 2H17 results, and he says that its cash flow is "strong," while its valuation is "low." He keeps a a Buy rating on the shares.
08/25/17
BARD
08/25/17
NO CHANGE
Target $21
BARD
Outperform
GameStop results inline but margin a bit light, says Baird
Baird analyst Colin Sebastian noted GameStop (GME) reported Q2 results inline with his expectations but said gross margins came in a bit light. He noted the results were generally driven by the Nintendo (NTDOY) Switch product. Looking ahead, the company should benefit from seasonal category strength, an ongoing hardware ramp, and improving pre-owned and tech brand trends, said Sebastian, who maintained his Outperform rating and $21 price target on GameStop shares.
NTDOY Nintendo

08/11/17
PIPR
08/11/17
NO CHANGE
PIPR
July NPD video game software sales rose 18%, says Piper Jaffray
Piper Jaffray analyst Michael Olson says July NPD video game software sales were up 18% year-over-year, driven by ongoing strength from Nintendo (NTDOY), which had three of the top five titles for the month. The numbers bode well for Activision Blizzard (ATVI) and Take-Two (TTWO), Olson tells investors in a research note. He keeps Overweight ratings on the those two as well as Electronic Arts (EA).
07/18/17
PIPR
07/18/17
NO CHANGE
PIPR
June NPD video game software sales dropped 5%, says Piper Jaffray
Piper Jaffray analyst Michael Olson says June NPD video game software sales were down 5% year-over-year due to a tough compare with Activision Blizzard's (ATVI) Overwatch the prior year. Top titles for June included Nintendo's (NTDOY) ARMS and Tekken 7 from Bandai Namco, Olson tells investors in a research note. He notes that for the June quarter, Activision results are down 42% and Take-Two (TTWO) NPD results are down 12% relative to his expectations for down 33% and down 3%, respectively. He remains comfortable with his estimates, however, and keeps Overweight ratings on Activision, Electronic Arts (EA) and Take-Two.
06/27/17
CHLM
06/27/17
NO CHANGE
Target $17
CHLM
Buy
Craig-Hallum predicts 'strong beat and raise' coming from Cypress Semi
Craig-Hallum analyst Anthony Stoss believes Cypress Semiconductor can hit the $545M midpoint of its Q2 guidance on $20M in incremental Nintendo (NTDOY) Switch revenues alone even if the rest of its business if sequentially flat and he predicts it will "handily beat" the consensus revenue estimate of $546M. He raised his estimates for the June and September end quarters for both revenue and EPS and reiterates a Buy rating and $17 price target on Cypress Semi shares.
MSFT Microsoft
$72.69

-0.03 (-0.04%)

07/21/17
STFL
07/21/17
NO CHANGE
STFL
Microsoft should be bought on any weakness, says Stifel
Stifel analyst Brad Reback says that Microsoft reported "strong" Q4 results, as he noted that the growth of its cloud business, Azure, accelerated to 98% year-over-year, while its commercial bookings surged 30% year-over-year. He expects the company's operating profit and free cash flow to accelerate in coming quarters and raised his price target to $80 from $73 while keeping a Buy rating. .
07/21/17
RAJA
07/21/17
NO CHANGE
Target $84
RAJA
Strong Buy
Microsoft price target raised to $84 from $77 at Raymond James
Raymond James analyst Michael Turits raised Microsoft's price target to $84 and reiterated his Strong Buy rating following the across-the-board Q4 beat on strong commercial bookings and cloud results. The analyst trimmed FY18 and FY19 earnings on the down margin guidance and higher taxes but expects margin expansion in FY19 as cloud margins continue to rise.
07/28/17
DBAB
07/28/17
DOWNGRADE
Target $180
DBAB
Hold
MicroStrategy downgraded to Hold from Buy at Deutsche Bank
Deutsche Bank analyst Karl Keirstead downgraded MicroStrategy (MSTR) to Hold and cut his price target for the shares to $180 from $220 citing the "disappointing" Q2 results as well as the company's strategy shift. Last night's results marked the third consecutive quarter of license revenue declines, Keirstead tells investors in post-earnings research note. MicroStrategy is now pivoting to a "much more aggressive" spending strategy in response to competition from Tableau (DATA) and Microsoft (MSFT), the analyst adds. He believes the stock has more downside risk.
08/07/17
FBCO
08/07/17
NO CHANGE
Target $84
FBCO
Outperform
Microsoft new accounting standards to have little impact, says Credit Suisse
Credit Suisse analyst Michael Nemeroff notes that Microsoft recently hosted a conference call to discuss its new reporting standards to reflect ASC 606 and ASC 842, which will be in effect starting with Q1 results. The analyst estimates little to no impact to his 2018 and 2019 estimates given this accounting update. However, there is higher volatility in quarterly revenue with different seasonality patterns throughout the year versus the prior standard, he adds. Nemeroff reiterates an Outperform rating and $84 price target on the shares.
SNE Sony
$38.62

0.43 (1.13%)

04/21/17
JPMS
04/21/17
UPGRADE
JPMS
Overweight
Sony upgraded to Overweight from Neutral at JPMorgan
04/25/17
BERN
04/25/17
INITIATION
BERN
Outperform
Sony initiated with an Outperform at Bernstein
Bernstein analyst David Dai started coverage of Sony with an Outperform rating. The analyst says that Sony's image sensor business should be boosted by advances in computers' communications capabilities and by the proliferation of VR/AR. The analyst adds that the company's PlayStation console "will maintain the leading position in tethered VR for the next three years at least," and he says that this status "should strengthen the PlayStation ecosystem." ,
04/25/17
04/25/17
INITIATION

On The Fly: Top five analyst initiations
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Sony (SNE) initiated with an Outperform at Bernstein. 2. Rockwell Collins (COL) reinstated with a Sell at Goldman Sachs. 3. Idera Pharmaceuticals (IDRA) initiated with an Outperform at Baird. 4. GasLog (GLOG) initiated with an Outperform at Credit Suisse. 5. Fitbit (FIT) initiated with a Buy at Benchmark. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
06/08/17
BERN
06/08/17
NO CHANGE
BERN
Sony price target raised to $47 from $41 at Bernstein
Bernstein analyst David Dai raised his price target on Sony as he thinks that the company's growth will be boosted by strong sales of its game and image sensors. He keeps an Outperform rating on the stock.
EA Electronic Arts
$117.82

-0.36 (-0.30%)

08/22/17
PIPR
08/22/17
NO CHANGE
Target $128
PIPR
Overweight
Early reviews point to 'good not great' new Madden game, says Piper Jaffray
Piper Jaffray analyst Michael Olson noted that early review scores for Electronic Arts' latest Madden video game, the just-released Madden NFL 18, are modestly below the prior game in the series and appear to be "good, but not great." While he does not think the lower metacritic scores are a material negative, they do leave him comfortable with his forecast for Madden sales to be flat year-over-year at 5.5M units. Olson keeps an Overweight rating and $128 price target on Electronic Arts shares.
08/22/17
FBCO
08/22/17
NO CHANGE
FBCO
Facebook at top of investors preferences in consumer internet sector, says Credit Suisse
According to conversations he had over the last few weeks, Credit Suisse analyst Stephen Ju says not much has changed in positioning around long-term investment theses, with earnings results driving the willingness to upside/downsize. Hence investors' most favored list has shifted to number 1 Facebook (FB), number 2 Amazon (AMZN), and number 3 Google (GOOG; GOOGL), he said. Away from the large caps, the analyst notes that MercadoLibre (MELI) as well as the videogame stocks remain popular topics for discussion, with increasing activity in Take-Two (TTWO) relative to Activision Blizzard (ATVI) and Electronic Arts (EA).
ATVI Activision Blizzard
$63.43

-0.58 (-0.91%)

08/04/17
08/04/17
UPGRADE

On The Fly: Top five analyst upgrades
Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. GoPro (GPRO) was upgraded to Neutral from Underperform at Longbow and to Market Perform from Underperform at Raymond James. 2. Yelp (YELP) was upgraded to Buy from Neutral at MKM Partners and to Neutral from Sell at Roth Capital. 3. Synaptics (SYNA) upgraded to Buy from Hold at Craig-Hallum with analyst Anthony Stoss saying he expects to see substantial TDDI volume increases in fiscal 2018 and believes its optical fingerprint sensor should be a strong growth driver. 4. Activision Blizzard (ATVI) upgraded to Buy from Neutral at BofA/Merrill with analyst Justin Post citing the solid second quarter beat on strong digital content. 5. Arista Networks (ANET) was upgraded to Overweight from Neutral at JPMorgan and to Outperform from Market Perform at William Blair. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
TTWO Take-Two
$95.25

0.85 (0.90%)

08/03/17
KEYB
08/03/17
NO CHANGE
KEYB
Take-Two price target raised to $104 from $87 at KeyBanc
KeyBanc analyst Evan Wingren raised his price target on Take-Two after the company reported much stronger than expected results. The analyst says that the strong user metrics for its GTA game has caused him to raise his estimates for its RDR2 offering. He keeps an Overweight rating.

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Cleveland-Cliffs

$7.62

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MTCH

Match Group

$42.10

0.54 (1.30%)

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IAC

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Match Group slips after analyst cuts rating on Tinder slowdown »

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MTCH

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IAC

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ANGI

Angi Homeservices

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MOS

Mosaic

$27.78

1.0176 (3.80%)

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Mosaic call volume above normal and directionally bullish »

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ABBV

AbbVie

$120.00

2.02 (1.71%)

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Radware

$21.09

-0.25 (-1.17%)

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Radware

$21.09

-0.25 (-1.17%)

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QTWO

Q2 Holdings

$42.85

-1.8 (-4.03%)

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Hortonworks

$18.22

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PVG

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AAP

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