What to Expect When GameStop Reports After the Close

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GameStop Corp. (NYSE: GME) shares have been holding near a multiyear low for practically the entire summer. This stock might have lulled many investors to sleep, but with retailers making a stand in August after a lackluster year, GameStop might be poised to break out. Considering the video game retailer has its most recent quarterly earnings coming out after Thursday’s close, this could be the start of a turnaround.

So far in 2017, GameStop has underperformed the broad markets, with the stock down about 15%. Over the past 52 weeks, the stock is down 33%. Currently the stock is at a price level not seen since back in 2012.

As for the earnings, the company plans to report its fiscal second-quarter financial results after the closing bell, and Thomson Reuters is calling for $0.16 in earnings per share (EPS) and $1.64 billion in revenue. The same period of last year reportedly had EPS of $0.27 and $1.63 billion in revenue.

GameStop’s transformation is continuing to take hold in 2017. Looking into this year, management expected Technology Brands and Collectibles to generate strong growth, and so far this has kept the company up to speed. New hardware innovation in the video game category has been substantial this year as well.

Despite the solid growth seen in these segments, U.S. sales still need to pick up to make this a viable earnings report. Not to say that the 17% growth in the international comparable sales was bad last quarter, but the U.S. comparable sales (−2.4%) still brought consolidated comparable sales down to 2.3%.

A few analysts weighed in on GameStop ahead of the earnings report:

  • Loop Capital has a Buy rating with a $28 price target.
  • Telsey Advisory Group has a Market Perform rating.
  • Oppenheimer has a Hold rating.
  • Credit Suisse has a Hold rating with a $20 price target.
  • Robert Baird has an Outperform rating with a $24 price target.

Shares of GameStop were last seen up 2% at $21.91, with a consensus analyst price target of $23.38 and a 52-week range of $20.10 to $32.25.