GameStop's Stock Tumbles Toward 6-month Low After Analyst Downgrade

GameStop Corp.'s stock tumbled 12% in morning trade Friday, putting it on track to close at a six-month low, after the videogame retailer was downgraded at Pacific Crest, which cited valuation and an uncertain growth outlook. Analyst Evan Wilson cut his rating to sector weight, after being at overweight for the last 10 months. Wilson said he had turned bullish on the stock given the possibility of a return to new software growth this year, and further potential for growth in 2016. Given recent industry data, which showed software sales declining in October, he said his hope for a return to new physical software growth "looks more risky." With the stock's appreciation this year--it has soared 32% year to date through Thursday while the S&P 500 had lost 0.6%--"and a smaller chance for growth, we think due largely to digital, we're downgrading it to sector weight," Wilson wrote in a note to clients.