GameStop Corp (GME) is gearing up to unveil its second-quarter financial results on Tuesday after the market closes, and investors and analysts are eager to hear more about the company’s financial standing and future growth initiatives.
Earnings Estimates:
Analysts are predicting that GameStop will report revenue of $895.7 million for the second quarter, according to data from Benzinga Pro. This represents a decrease from the $1.16 billion in revenue the company generated in the same period last year. GameStop has missed analyst revenue expectations in the past three quarters, and six out of the last ten overall.On the earnings front, analysts are projecting a loss of nine cents per share for the second quarter, a decline from the three-cent loss reported in the second quarter of 2022. GameStop has also missed earnings per share estimates in the past two quarters and six out of the last ten.
It’s worth noting that the video game retailer reported a loss of 12 cents in the first quarter, ending a period of profitability where they posted earnings of 22 cents per share in the fourth quarter and broke even in the third quarter.
Recent Share Performance and Investor Sentiment:
GameStop’s shares have seen a year-to-date increase of 43%, but have experienced a pullback in recent months. The upcoming earnings report comes on the heels of a recent social media post from Roaring Kitty, a prominent investor who previously sparked significant interest in GameStop. Investors are keen to understand the potential implications of this post, particularly in terms of Roaring Kitty’s investment strategy.Key Areas to Watch:
GameStop has been relatively quiet in terms of updates and often releases earnings without conducting a conference call. However, the second-quarter results could shed light on the strength of video game sales, especially with the release of EA Sports ‘College Football 25’ in July. This highly anticipated game has the potential to become a bestseller.Investors will also be looking for updates on how GameStop plans to utilize the cash it has raised through recent offerings. Since a company rule change in 2023, there has been speculation about potential mergers, acquisitions, and investments.
Analyst Perspective:
Wedbush analyst Michael Pachter recently lowered the price target on GameStop shares from $13.50 to $11, assigning an Underperform rating. This adjustment was attributed to the company raising less capital from share offerings than expected due to the timing of a YouTube presentation by Roaring Kitty.GME Price Action:
GameStop’s stock traded up 2.76% on Monday, reaching $24.58 at publication. Its 52-week trading range spans from $9.95 to $64.83.With the earnings report on the horizon, all eyes are on GameStop to see what direction the company will take in the coming months. The company’s future trajectory hinges on its ability to capitalize on growth opportunities and navigate a competitive landscape within the gaming industry.
