GameStop (NYSE:GME) stock is in the green today ahead of its crucial third-quarter earnings call next Wednesday, Dec. 6. The famously meme-driven stock is up over 10% heading into the afternoon on little pertinent news.
What do you need to know?
Well, GameStop is still a company in dire need of some momentum. Even with Chewy (NYSE:CHWY) founder Ryan Cohen in the chief executive position, GME has been on a slow and painful decline. Indeed, the meme-rally fueled days of $80 a share are long gone. Currently, GME is trading for just $13 a share, down nearly 25% year-to-date, even as the S&P 500 is up about 19% over the same time period.
On Monday, GME shed 2.38% of its value, briefly dropping below $12. This also represented its fifth consecutive day of losses, a streak that cost the stock 8.6% of its share price.
What Do You Need to Know About GME Stock Ahead of Q3 Earnings?
GameStop is expected to report an earnings per share loss (EPS) of 18 cents in its fiscal Q3, per Nasdaq. If true, this would show a deterioration from the company’s Q2 EPS loss of 3 cents. This would put GME on track to record a 12 cent EPS loss for the year.
Analysts are, by and large, bearish on GME. Reasonably so, the once thriving retail video game shop has had little to keep the company afloat. In 2022, the company began transitioning away from its e-commerce branch, relying more heavily on its 4,400 physical stores to sell disc-based video games. Unfortunately, with downloadable games continuing to grow in popularity, GameStop is in a difficult position.
In a recent email to employees in September, Cohen emphasized cost-cutting as a means to improve the company’s financial situation. According to InvestorPlace contributor Chris MacDonald, this is mostly a means of delaying the inevitable:
“…this approach, including delaying bill payments to temporarily boost profits, may not prevent further declines in GME stock. The company has been trimming expenses for over a year, likely reaching its limit.”
On the date of publication, Shrey Dua 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.
