GameStop Reports Earnings; What do the Analysts Have to Say?

GameStop Corp.

reported a beat on it first quarter 2014 EPS driven primarily by better than expected margins. Additionally, the company benefited from a lower than expected tax rate for the quarter and reiterated its previous full year guidance. Looking forward, company CEO Paul Raines stated, "GameStop is well positioned to use its strengths to achieve growth from its diversified business segments: gaming, mobile, wireless and consumer electronics." Analysts are coming in with mixed opinions regarding GameStop. B. Riley and Wedbush have responded to the company's solid performance by maintaining the equivalent of a Buy rating. Both firms have cited superior performance with the next gen. consoles as a strength for the company. Wedbush analysts expect GameStop to "gain a disproportionate share of new game sales for a slew of compelling core releases in fiscal year 2014. In an opposing view, Longbow has rated the company Underperform and has blamed digital downloads for being the primary driver behind the company's ongoing declines in prior-gen software sales. Moreover, the analysts believe "the digital transformation of the video game industry is well underway" and say GameStop must "meaningfully outperform" to plug this gap. The street appears to be in agreement with bulls as the stock is up as much as 5 percent for the day.