GameStop stock: Who didn’t see this coming, please?

GameStop: P/E ratio with buy signal

The most important indicator for fundamental analysis is the price-earnings ratio (P/E ratio). On its basis, Gamestop, with a value of 7.7, is significantly cheaper than the average in the industry “specialty retail” and therefore undervalued. The industry P/E ratio is 40.58 , which results in a gap of 81 percent. Therefore, we classify the stock as a “buy” recommendation.

How do investors express themselves in social media?

A look at the discussion in social media shows the following pictureThe market participants were basically mostly positive about Gamestop in recent days. There were a total of six positive days and five negative days. On three days, there was no clear direction. The latest news about the company in the past one or two days is also mainly positive. Based on our sentiment analysis, Gamestop therefore receives a “buy” rating. Overall, Gamestop receives a “buy” rating from the editorial team for investor sentiment.

Does stock price return meet market requirements?

Over the past year, the stock has returned -39.61 percent. Compared to stocks in the same sector (“Consumer Staples”), this puts Gamestop 79.89 percent below the average (40.28 percent). The median annual return for securities in the same “specialty retail” sector is 72.35 percent. Gamestop is currently 111.96 percent below this figure. Due to the underperformance, we rate the stock an overall “Sell” at this level.

GameStop entices with good dividend yield

With a dividend of 20.05%, Gamestop is rated higher compared to the industry average specialty retail (3.86%) in terms of payout, as the difference is 16.19 percentage points. From this, a Buy rating can be derived at the moment.

Investors see a lot of negativity

Significant changes in sentiment or communication frequency allow precise conclusions to be drawn about a stock’s current image in social media. In the case of Gamestop, a deterioration in the sentiment picture could be recorded in the past four weeks. We therefore rate the share as a “sell”. A slight reduction was registered in the frequency of communication. That is, less has been said about the company in recent weeks. Overall, Gamestop therefore receives a “Sell” rating at this level.

GameStop: Relative Strength Index Signals

On the basis of the Relative Strength Index, Gamestop’s stock is a Hold stock. The index measures the upward and downward movements of different time periods (RSI7 for seven days, RSI25 for 25 days) and assigns them a ratio between 0 and 100. For the Gamestop share, this results in a value for the RSI7 of 62.37, which entails a “Hold” recommendation, and a value for the RSI25 of 46.35, which entails a “Hold” rating for this period. This results in an overall “Hold” ranking at the Relative Strength Indicator level.

What price signals does the chart send?

A look at the chart performance of a stock using the moving average can be used to determine the current trend of the security. Let’s look at the moving average of the closing price of Gamestop stock from the last 200 trading days. This value is currently $30.66. This is significantly below the last closing price (USD 26.17) (difference -14.64 percent). On this basis, we therefore rate the share as “Sell” How does this calculation look if the moving average is determined on the basis of the last 50 trading days? This is currently USD 26.13, so the last closing price is at a similar level (+0.15 percent). This means that on this shorter-term analysis basis, the rating for Gamestop is different, and the stock gets a “hold” rating. Thus, the Gamestop stock is given a “hold” rating for the simple chart technique in aggregate.