The equity is brushing off narrower-than-expected losses per share this morning
GameStop Corporation (NYSE:GME) is plummeting today, down 15.6% at $14.29 at last check, after the video game retailer's third-quarter revenue miss had it brushing off narrower-than-expected losses per share. In response, Jefferies raised its price target to $15 from $13, while Telsey Advisory Group as well as Benchmark cut the stock's price objective to $18 and $5, respectively.
After hitting a Nov. 30 annual high of $19.42, the shares had consolidated between the $16-$17 region. Now gapping lower, today's pullback appears to have found support at the 40-day moving average. Longer term, GME sports an impressive 134% year-to-date lead.
The brokerage bunch was already bearish toward GameStop stock coming into today, with five of the six analysts in coverage carrying a "hold" or worse rating. Meanwhile, the 12-month consensus price target of $9.84 is a whopping 30.7% discount to its current perch.
Also worth noting, short interest makes up an impressive 66% of GME's available float, and would take over a week to cover at the stock's average pace of trading. In other words, there is plenty of pent-up buying power that could unwind to give the equity a boost.
Lastly, today's drop has options traders coming out of the woodwork. So far, 147,000 calls and 82,000 puts have crossed the tape -- five times what is typically seen at this point. The weekly 12/11 16-strike call is the most popular by far, with new positions being opened. This means that plenty of traders are betting on more upside for GME by the end of this week.