GameStop Shares Plunge 16% as Q4 Earnings Disappoint; Wedbush Predicts Inevitable Demise This Decade

GameStop reported disappointing Q4 earnings with revenue and earnings per share missing analyst estimates. The stock fell 16% on Wednesday following the results.

Analysts at Wedbush said GameStop's "demise" is inevitable at some point this decade due to declining sales and lack of a clear strategy.

Wedbush believes GameStop has enough cash to withstand $100 million in annual losses for 10+ years. But if declines accelerate, it may struggle to cut costs fast enough.

Wedbush cut its GameStop price target to $5.60 from $6, implying nearly 60% downside risk from current levels. The firm rates the stock Underperform.

GameStop net sales declined in fiscal 2023 and its net income was only $6.7 million compared to a $313 million loss last year.