What to expect from Game Stop

Game Stop is set to report earnings after the close on Tuesday. Shares hit a record high of $120.75/share in 2021 and are currently trading around $23. The stock is prone to big swings after the earnings announcement and could easily rally if the numbers are strong. On the other hand, if the numbers disappoint, the stock could easily fall. To help you prepare, here’s what the Street is expecting:

Profit preview

The company is expected to report a loss of ($0.01)/share on revenue of $900 million. Meanwhile, the so-called Whisper number is a loss of ($0.01)/share. The Whisper number is Wall Street’s unofficial view of earnings.

A Closer Look at the Basics

The company’s earnings have been rising and falling over the past few years. In 2020, the company earned $0.06 per share. In 2021, the company lost -$0.75. Then in 2022, the company lost -$1.14. In 2023, the company earned -$1.02. This year, earnings are expected to rise to $0.06, before falling to -$0.10 in 2025, and falling again to -$0.07 per share in 2026. Growth investors want the company to find a path to prosperity.

A Closer Look at the Specifications

Technically, the stock has been trading all over the map. Years ago, it was the symbol of a Reddit short squeeze. It recently had another big run before falling after a Reddit guy came back and revealed a big position. The stock is now 64% below its 52-week high, and short interest remains relatively high at 23%. Bulls want to see the stock gap up after an earnings release, and bears want to see it gap down.

Company Profile

GameStop Corp. is a specialty retailer that offers gaming and entertainment products through its stores and e-commerce platforms in the United States, Canada, Australia and Europe.

The company sells new and used gaming platforms; accessories such as controllers, gaming headsets, and virtual reality products; new and used gaming software; in-game digital currency, digital downloadable content, and full game downloads. It sells collectibles, including apparel, toys, trading cards, gadgets, and other retail products to pop culture and technology enthusiasts, and is also involved in a portfolio of digital assets and NFTs
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trade fair activities.

The company operates retail stores and e-commerce websites under the GameStop, EB Games, and Micromania brands, as well as pop culture-themed stores selling collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, and offers Game Informer magazine, a print and digital gaming magazine.

The company was previously called GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.

Pay attention to how stocks react to news

From my perspective, the most important thing I look for during earnings season is how the market and the individual company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Disclosure: This stock has been featured on FindLeadingStocks.com in the past.

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