GameStop (GME), a WallStreetBets favorite and phenomenon of the year, is set to report results for the fourth quarter and fiscal year 2020 on Tuesday afternoon. The shares were trading about 5% lower in the middle of Tuesday’s session.
These are the consensus estimates by Wall Street analysts for the fourth quarter, according to Bloomberg:
Revenue: $ 2.21 billion expected
Adjusted earnings: estimated $ 1.43 per share
Adjusted net income: estimated $ 106.9 million
GameStop announced the departure of its Client Director ahead of today’s earnings. This marks another major shift since activist investor and co-founder of Chewy (CHWY) Ryan Cohen joined the board of directors after accumulating a 13% stake in the company.
A pivot for digital and technology is what the future looks like for the struggling video game seller, with big ads in recent months serving as catalysts for rising stock prices and increasing speculation by retail investors from companies like Reddit’s WallStreetBets .
In early February, the company announced that Matt Francis, a former engineering leader at Amazon Web Services, would embark as its first chief technology officer. GameStop also announced that its chief financial officer, Jim Bell, would resign – news that caused stocks to more than double at the time.
Wall Street analysts pointed out that the video game retailer’s shares are being traded separately from the fundamentals. Currently, the stock has no analyst buy rating, 4 arrests and 3 sales, according to Bloomberg data.
GameStop was the target of a massive short squeeze by retail investors in January, when the stock peaked at $ 483 intraday on January 28. hovering around $ 185 / share.
During Tuesday’s conference call, retail analysts and investors will be paying attention to comments about the main digital / technological pivot that has been going on at GameStop since Cohen joined the board, and how that can translate into higher sales and a bottom line. growing financial situation.
Analysts may also ask why the company did not raise money through a stock offering when the stock was so high, although it is not clear that management will want to comment on the short squeeze frenzy. So far, GameStop executives have been kept silent about this.
The tightening in January sales generated hearings on Capitol Hill and increased scrutiny by the RobinHood trading platform, which temporarily restricted the purchase of GameStop and other heavily shorted stocks.
Much of the focus has also been on increasing retail investors and the influence of online forums. Keith Gill – the user known as “Roaring Kitty” on YouTube, told the Chamber’s Financial Services Committee in February that he believed GameStop could become a technology-driven business and, “by embracing the digital economy, GameStop can find new revenue streams that far exceed the value of your business. “
As for worldwide attention to inventory, Placer.ai data indicates that the GameStop phenomenon may be correlated with an upward trend in pedestrian traffic at the retailer in recent months.
“In the week of December 28, for example, the visitor count dropped by almost 18% year on year. But in early March, they dropped by only about 4%,” according to Placer.ai.
Ines serves the American stock market. Follow her on Twitter at @ines_ferre
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