Earnings Reports to Watch: GameStop (GME)
The last company on this list hasn’t enjoyed any gains in recent years. Brick-and-mortar video games retailer GameStop has struggled due to steep competition and a shift to streaming games. Indeed, for the most recent three months, a 2% sales decline is slated, while earnings should shrink by 23%.
Worse, full-year earnings are expected to decline by 13%, and then be compounded by another 33% decline next year. Earnings estimates for every period — current quarter, next quarter, current year, next year — have fallen dramatically in the past three months alone.
The silver lining is that GameStop stock has been beaten down to the point that such a downtrend is more than accounted for. Shares are currently trading for just seven times forward earnings, and the stock’s decline has bred a nearly 7% dividend yield.
But bottom-fishing has never been my strategy of choice. It’s hard to time and comes with a lot of risk. Unless we see some strong evidence of a turnaround in the earnings report, I’d find a more fundamentally sound play on the video game space.
Hilary Kramer is the editor of GameChangers, Breakout Stocks, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.