Bet on GameStop as it Hits New High - Analyst Blog

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Shares of GameStop Corporation ( GME ) surged to attain a new 52-week high of $43.01 on Jul 5, 2013, before closing at $42.99. Shares of this Zacks Rank #3 (Hold) stock have amassed a year-to-date return of roughly 70.8%.

Based on the current price, this video game and entertainment software retailer is 3.3% above the Zacks Consensus average analyst price target of $41.61. The company currently trades at a forward P/E of 13.81x, in line with the peer group average. Additionally, the company's long-term estimated EPS growth rate is 13.7%.

GameStop is well positioned to take the advantage of the growing market for video game products and PC entertainment software. The company's strategy is to branch out through store expansions in favorable localities by providing the largest title collection of video games and leveraging its first-to-market distribution network to offer the latest hardware and software releases.

GameStop has been evolving continuously and transformed as a mixed retailer of physical and digital gaming and electronic products. The company's ventures in digital, iDevice and gaming tablet businesses are expected to be accretive to its results.

Moreover, shares of GameStop have reacted positively to the announcement made by Microsoft Corporation ( MSFT ) that Xbox One is enabled to play used games and is not going to levy platform fee, thus enabling the smooth transfer of used and pre-owned games. GameStop's buy-sell-trade model of selling new games and buying back used games and PowerUp Rewards program make it a popular destination for gamers.

GameStop is not the only company that is anticipated to benefit from this, as the move is likely to auger well for game publishers like Electronic Arts Inc. ( EA ) as well.

Alongside, shares of Gap Inc. ( GPS ) reached a new 52-week high of $43.39 on Jul 5, and eventually closed trade at $43.30.



ELECTR ARTS INC (EA): Free Stock Analysis Report

GAMESTOP CORP (GME): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

MICROSOFT CORP (MSFT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EA , GME , GPS , MSFT

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