GameStop CoverageStop: GME's last sell-side analyst walks away

Wedbush has ceased coverage of GameStop, leaving the company without an official Wall Street rating, as analyst Alicia Reese reallocates resources and withdraws her previous Underperform rating and target price of $13.50.

GameStop's identity as a meme stock complicates traditional financial evaluations, with its performance reflecting a shift from fundamental metrics to retail investor enthusiasm and increased cash reserves from cryptocurrency ventures.

Despite the withdrawal of formal ratings, analyst sentiment remains relatively positive, with three Buy and two Hold ratings currently assigned, while some analysts note significant improvements in profitability due to cost reductions and increased income from digital assets.

The Quant Rating system rates GameStop as a Hold, emphasizing strong growth potential (A+) but revealing concerns with momentum (C) and valuation (D), indicating a complex financial outlook for the retailer.

Recommendation Rating: GameStop (NYSE:GME) Coverage Update

Wedbush is ceasing its coverage of GameStop (NYSE:GME), leaving the retailer without an official rating from Wall Street amidst its ongoing resistance to conventional financial analysis.

Analyst Alicia Reese stated, "We are discontinuing our coverage of GameStop (NYSE:GME) due to a reallocation of our analyst resources. As a result, our previous rating of Underperform, along with the target price of $13.50 and related estimates, should no longer be considered reliable."

Reese’s target price reflects a valuation that is nearly 50% lower than the current trading levels, and she was the final sell-side analyst to provide a rating for the stock. While Baird analyst Colin Sebastian continues to monitor the stock, he has not assigned a specific rating.

GameStop’s journey as a meme stock, initially popularized by the online persona Roaring Kitty, has made it a complicated subject for traditional Wall Street evaluations. The stock's performance has deviated from fundamental metrics, especially as the emphasis shifts from the enthusiasm of retail investors toward the company's growing cash reserves and its ventures into cryptocurrency.

Despite Wall Street's withdrawal from providing ratings for GameStop, there remains an overall positive sentiment among analysts, with 3 Buy ratings and 2 Hold ratings currently assigned to the stock.

Daniel Jones, leader of the Crude Value Insights Investing Group, recently upgraded GameStop from Sell to Hold, noting, "Profitability has significantly improved, driven by cost reductions, increased interest income, and gains from digital assets, although some of these gains may be temporary."

From a quantitative analysis perspective, the Quant Rating system rates the stock as Hold, awarding it an impressive A+ for Growth. However, it scores a C for Momentum and a D for Valuation, highlighting the mixed signals surrounding GameStop's financial health and market position.