This afternoon, GameStop (NYSE:GME) is set to report earnings. Indeed, this is a key day for investors in GME stock to get a sneak peek into how the company’s management team has been doing in turning around its operations.
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Today, shares traded as much as 6% lower before rallying early this afternoon. Investors appear to be on the fence about what to expect from these results.
So, let’s dive into a few things investors should keep their eyes on with this earnings report.
5 Key Things to Watch With GME Stock Earnings
- Obviously, how the company does compared to expectations is hugely important. Wall Street expects the company to report $2.21 billion in revenue, adjusted earnings of $1.43 per share and adjusted net income of $106.9 million. Any significant deviation from these numbers could be cause for some serious volatility tomorrow.
- Additionally, investors will want to keep a close eye on the company’s e-commerce performance. There’s a lot of speculation that GameStop will outperform in this key growth segment. This comes after the company announced earlier this year Ryan Cohen, co-founder of Chewy (NYSE:CHWY), joined the board.
- At the same time, GameStop just announced another key executive departure. Ahead of earnings, the company shared that Chief Customer Officer Frank Hamlin will leave March 31. This comes after GameStop announced the resignation of CFO Jim Bell, who will leave on March 26. Any sort of departure immediately prior to earnings can stir the tea leaves among speculative investors.
- Accordingly, options traders appear to be overly bearish on this earnings report. According to CNBC, a downside move of around 14% is implied via options prices right now.
- Expectations are that analysts could inquire as to why GameStop’s management team hasn’t issued shares despite a rapid upward move in its stock price. However, it remains unlikely the company will comment on the short-squeeze mania that’s provided GME stock with so much momentum.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
