GameStop Corp. (NYSE: GME) is set to report its fiscal first-quarter financial results after the markets close on Thursday. The Thomson Reuters consensus estimates are $0.61 in earnings per share (EPS) on $1.97 billion in revenue. In the same period of last year, GameStop posted EPS of $0.68 and $2.06 billion in revenue.
Trading at just above eight times this fiscal year’s earnings, this video game retailer might be a steal at this price level, looking at the short term, but over a longer term it could be a value trap. These earnings should bring some insight into where this stock is really headed.
This company operates as a multichannel video game retailer. It sells new and pre-owned video game hardware; physical and digital video game software; pre-owned and value video game products; and video game accessories, such as controllers, gaming headsets, memory cards and other add-ons for use with video game hardware and software.
However with the advent of the Xbox One and PS4 and downloadable games and content, this company could suffer on the brick-and-mortar side, which constitutes a fair amount of its business.
Prior to the release of the earnings report, a few analysts weighed in on the stock:
- Piper Jaffray reiterated an Overweight rating with a $41 price target.
- Wedbush reiterated an Outperform rating with a $36 price target.
- Credit Suisse reiterated a Hold rating.
- Baird reiterated an Outperform rating with a $46 price target.
So far in 2016, GameStop has outperformed the broad markets, with the stock up over 7%. Over the past 52 weeks, the stock is down about 22%.
Shares of GameStop were trading up about 1% at $30.07 on Thursday, with a consensus analyst price target of $36.23 and a 52-week trading range of $24.33 to $47.83.
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