GameStop Corp. (GME) shares slipped Wednesday after the video game retailer delivered third-quarter results that perfectly captured the company's current predicament: making progress in some areas while still struggling to gain real traction.
The Numbers Tell a Complicated Story
GameStop's Q3 revenue came in at $821 million, falling short of the $987.28 million analysts expected. The earnings side looked better, with adjusted earnings of 24 cents per share topping estimates of 20 cents per share.
Total revenue dropped roughly 4.5% year-over-year, dragged down by declining hardware, accessories, and software sales. But there was one bright spot: collectibles revenue jumped to $256.1 million from $171.1 million in the same quarter last year. Apparently, people still want their Funko Pops and gaming memorabilia.
More encouraging was the operating income picture. GameStop generated $41.3 million in operating income for the quarter, a significant turnaround from the $33.4 million operating loss it posted in Q3 2024.
The company closed the quarter sitting on approximately $8.8 billion in cash and $519.4 million in Bitcoin (BTC) after adding the cryptocurrency to its balance sheet earlier this year. That's a lot of dry powder, though the question remains what GameStop plans to do with it.
What the Charts Are Saying
From a technical standpoint, GameStop is sending mixed signals. The stock is trading just above its 20-day simple moving average, suggesting some short-term support, but it's sitting well below its 50-day, 100-day, and 200-day SMAs. That's not exactly a confidence-inspiring setup.
The RSI currently sits at 59.42, putting it in neutral territory. The stock isn't overbought or oversold right now, which means traders should watch for any momentum shifts that could push it decisively in either direction.
Meanwhile, the MACD indicator is above its signal line, hinting at bullish momentum in the short term. That could mean some upward price movement is possible, though traders should remain cautious given the bearish trend shown by those moving averages.
Key support sits at $21.00, with resistance at $24.50. If the stock tests support and holds, it might present a buying opportunity. A break below that level could signal further declines, while pushing through resistance could indicate the start of a trend reversal.
The technical picture got notably darker back in July when the death cross occurred—that's when the 50-day SMA crossed below the 200-day SMA, signaling a shift to bearish sentiment. That crossover has weighed on the stock ever since.
Over the past 12 months, GME has declined 14.18%, and the stock is currently positioned near the lower end of its 52-week range. For traders, the current setup suggests that while short-term opportunities might exist, the longer-term trend remains concerning.
GME Price Action: GameStop shares were down 5.45% at $21.85 at the time of publication Wednesday morning.
