GameStop is worth $16 and little has changed in the fundamental story, CFRA says

GameStop is worth $16 and little has changed in the fundamental story, CFRA says
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  • CFRA maintained its "sell" rating and $16 price target on GME shares on Friday.
  • Analyst Camilla Yanushevsky said bulls are wearing "rose-tinted glasses."
  • Yanushevsky's note contrasts the $175 price target that Jefferies released on Wednesday.

GameStop stock is still worth just $16 per share and little has changed in the fundamental story of the company, CFRA analysts say.

In a note to clients on Friday, CFRA analyst Camilla Yanushevsky maintained her "sell" rating and $16 12-month price target on shares of GameStop.

The analyst said she believes "bullish investors are wearing rose-tinted glasses" when it comes to the video game retailer and argued the thesis that GameStop will become the "Amazon of video games" is unlikely.

GameStop missed analyst estimates in its fourth quarter and full-year earnings report on Tuesday. The company turned in $5.08 billion in revenue compared to analyst estimates of $5.27 billion.

The video game retailer was also unable to prevent another net loss of $215 million on the year despite cost-cutting initiatives and closing hundreds of stores.


CFRA analyst Yanushevsky noted that GameStop failed to provide a fiscal year 2022 outlook as well. The analyst called the initiatives outlined in the company's earnings report "far from productive."

Yanushevsky valued GameStop using a sales multiple of 0.2x, which she said was "above the 3-year historic average" due to the firm's "ability to more readily tap markets for cash."

"GME has suffered nearly a decade of self-inflicting wounds from poor acquisitions and half-hearted turnarounds --we still have yet to know why this time is different," Yanushevsky wrote.

The note from CFRA stands in contrast to a note from Jefferies analyst Stephanie Wissink that came out on Wednesday.

Wissink holds a $175 price target on GameStop based on a sales multiple of 3.4x, which Wissink said was a 20% discount to peers.


Wissink argued GameStop's move into e-commerce, "digital and affiliated value streams" will help differentiate the firm moving forward.

Wissink is an outlier among analysts, however. The video game retailer currently holds two "buy" ratings, five "sell" ratings, and two "neutral" ratings from analysts who hold a median price target of just $15.64 per share.