GameStop (GME), a favorite and phenomenon of the year from WallStreetBets, will report the results of the fourth quarter and the financial year 2020 on Tuesday afternoon. The stock traded about 5% lower by the middle of the session on Tuesday.
According to Bloomberg, these are the consensus estimates from Wall Street analysts for the fourth quarter:
Revenue: $ 2.21 billion expected
Adjusted earnings: $ 1.43 per share estimate
Adjusted net income: estimate of $ 106.9 million
GameStop announced the departure of its chief customer officer before earnings today. This is another important step in the c-suite since activist investor and Chewy (CHWY) co-founder Ryan Cohen joined the board after acquiring a 13% stake in the company.
A focus on digital and technology is what the future holds for the struggling seller of video games, with big announcements over the past few months as a catalyst for the rising price of the stock and increased speculation from small investors by people like Reddit’s WallStreetBets.
In early February, the company announced that Matt Francis, a former engineering leader at Amazon Web Services, would be the first chief technology officer ever to board. GameStop also announced that its chief financial officer, Jim Bell, will resign – news that more than doubled the stock at the time.
Wall Street analysts stressed that shares of the video game retailer are independent of the fundamentals. According to Bloomberg data, the stock currently has no buyout, 4 Holds, and 3 Sells analysts.
GameStop was the target of a big short push by retail investors in January when the stock hit a high of $ 483 on January 28th. The share has since risen in a volatile manner, but has risen more than 870% since Tuesday morning. at about $ 185 per share.
Analysts and retail investors will pay close attention during the conference call on Tuesday to comments on the key digital / technology hub at GameStop since Cohen jumped on the bandwagon, and how it could lead to higher sales and a growing conclusion.
Analysts may also ask why the company did not raise money through a stock offer if the shares were so high, although it is unclear that management wants to comment on the short-press madness at all. So far, GameStop drivers have struggled with it.
The short pressure of January sparked hearings on Capitol Hill and increased investigations into the RobinHood trading platform, which temporarily restricts the purchase of GameStop and other heavily shortened shares.
Much of the focus has also looked at the rise of retail investors and the influence of online forums. Keith Gill – the user known as ‘Roaring Kitty’ on Youtube, told the House Financial Services Committee in February that he believed GameStop could turn into a technology-driven business, and ‘by embracing the digital economy,’ GameStop may be able to find new revenue streams that significantly exceed the value of its business. ‘
In terms of global inventory attention, data from Placer.ai indicate that GameStop phenomena over the past few months may be correlated with an upward trend in foot traffic at the retailer.
“In the week of December 28, for example, visitor numbers fell by 18% compared to the year, but from the beginning of March it was just under 4%, according to Placer.ai.
Ines covers the US stock market. Follow her on Twitter @ines_ferre
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