GameStop ((((GME)- Get a Class A report for GameStop Corp. The announcement of financial results for the fourth quarter is just around the corner. Video game retailers will report on March 17th after Closing Bell.
In the meantime, let’s take a closer look at what you can expect from GameStop sharing.
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GameStop Q3 Summary
GameStop worked very well in terms of revenue during that period Third quarter.. It reported revenue of $ 1.3 billion. This is 30% higher than in the third quarter of the previous year and much better than the market expected.
The company was also able to increase its inventory by about $ 300 million year-on-year to $ 1.14 billion. GameStop focused on inventory frontloading to meet growing customer demand and mitigate supply chain issues.
Interestingly, GameStop chairman Ryan Cohen proposed his other big holding, Bed Bath & Beyond. ((((BBBY)- Get the Bed Bath & Beyond Inc. ReportDo the same.
However, in the third quarter, GameStop reported a earnings loss of 87 cents per share and a loss of $ 1.39 per share. Tax costs can explain some of that big mistake. GameStop incurred tax costs that were always difficult to predict during the quarter. In the third quarter of last year, GameStop booked a major tax incentive.
The company did not provide guidance on the phone in the third quarter. However, CEO Matt Furlong said toplines are the main focus of GameStop.
GameStop’s share price fell 5.5% after the company posted third-quarter revenue. This may be due to the fact that GameStop’s management team didn’t open up for future initiatives.
What to expect from GameStop’s Q4
To exceed market expectations for earnings, GameStop must report earnings per share in excess of 84 cents. This target is more than 37% lower than the target the company reported in the same quarter last year.
Figure 2: GameStop EPS Surprise and Quarterly Quotes.
TipRanks
To exceed revenue expectations, GameStop needs to report more than $ 2.22 billion. This is an increase of over 4% from the same period last year.
The lack of clarity given by the company’s management in the last quarter made things a little cloudy. The last revenue call felt like GameStop’s management had checked the checkbox.
This practice may continue. As Cohen recently said in a letter of advice to Bed Bath & Beyond Board, he doesn’t believe in guidance. He doesn’t admit that management teams spending time dealing with Wall Street can spend time focusing on the customer experience.
But in the fourth quarter, third-party news GameStop is about to launch an NFT marketplace platform The partnership with Immutable X will allow users to trade in-game assets via blockchain tokens on the Ethereum platform.
This initiative could be a major step towards GameStop’s modernization and growth of the business. Some updates from the company’s management regarding the progress of the project can be very bullish for GME shares.
Is GME Stock Earnings Really Important?
Most of GameStop’s shareholders are individual investors. Perhaps they bought GameStop stock to beat shortsellers rather than focusing on the company’s fundamentals.
However, as we have seen in the last few months, GME has been a highly volatile stock. In general, a wide range of markets are affecting investor sentiment. Therefore, surprises related to a company’s fundamentals, such as news about the NFT market, can excite investors and boost market share.
As with any recent quarter, if the fourth quarter turns out to be a “normal business,” you should expect that performance will not have a significant impact on your stocks.
Twitter speaks
What do you think was the biggest catalyst for GameStop stock in Q4 earnings?
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