GameStop (NYSE:GME) is set to report earnings after the bell today and meme stock investors will be watching closely.
Shares rose 4.4% yesterday, Sept. 5, but edged lower in pre-market trading today. GameStop opened Sept. 6 at about $19 per share and a market capitalization of around $5.8 billion. As of this writing, GME stock is down roughly 3% for the day.
Analysts expect GameStop to report a loss of 14 cents per share for the July quarter on revenue of $1.14 billion. The July quarter is usually the weakest quarter for the company, which hasn’t booked a full-year profit in the last five fiscal years.
GME Stock: What a Fool Believes
Since Chewy (NASDAQ:CHWY) co-founder Ryan Cohen helped spark the meme stock wave of 2021, eventually taking over the company, the value of GameStop has fallen. Shares traded for over $80 apiece at the height of the craze.
This summer, Cohen led a clear-out of top executives. CEO Matthew Furlong was fired, with Cohen becoming Executive Chairman. Chief Financial Officer Diana Saadeh-Jajeh resigned as of Aug. 11.
As earnings approach today, traders are hoping for good news. Analysts, however, seem to have mostly given up on GME stock. Only one analyst is tracking GameStop on TipRanks — with a “sell” rating.
The shares have bounced off technical support near $16 three times and the company could report a Christmas season profit next year. The stock has also been helped by owners keeping it out of the hands of short sellers.
But the fundamentals are something else entirely. Cohen has talked of exploring “strategic options” and long-term value creation but hasn’t held a call with analysts in some time. While there are pockets of strength within the industry, analysts fear GameStop is losing share to digital outlets and online gaming.
What Happens Next?
When Furlong was ousted in June, I wrote that Cohen’s reputation was now on the line. That remains the case. While GameStop still has $1.3 billion in cash on the books as of April, time is not on the exec’s side.
The next revolt could be against Cohen himself.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
