GameStop Corp. (NYSE: GME) is set to report its fourth-quarter financial results after the markets close on Thursday. Thomson Reuters has consensus estimates of $2.16 in earnings per share (EPS) on $3.62 billion in revenue. In the same quarter of the previous year, the company reported $1.90 in EPS and revenue of $3.60 billion.
The company previously reiterated its guidance for the fourth quarter when it reported its third-quarter earnings. The outlook for the quarter was $2.08 to $2.24 in EPS, and same-store sales are expected to range from -5.0% to +2.0%. At that time, this guidance was below estimates.
Looking at the chart, the last earnings report caused shares to fall off a cliff, down roughly 13% to $37.52 from $43.14. Back in November 24/7 Wall St. mentioned that this could be an opportunity for investors to buy the dip, expecting that the company could turn it around in the holiday season. Since that time shares have recovered to current prices, but this earnings report will be a key factor in the direction of shares.
For the past two settlement dates, it appears that short sellers have been gearing up for the company. On March 13 settlement date, GameStop saw its short interest rise to 24.3 million with 5.1 days to cover, compared to 21.2 million with 5.2 days to cover on the previous settlement date. Since the mid-February settlement date, short interest has risen approximately 25%.
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In the days ahead of earnings, GameStop has received a few analyst calls:
- B. Riley reiterated a Buy rating with a price target of $64, implying upside of 63%.
- Oppenheimer maintained a Buy rating with a price target of $45, an upside of almost 10%.
- Credit Suisse had a Hold rating with a price target of $42.
The stock movement has been practically immaterial for both the 50- and 200-day moving averages.
Shares of GameStop were down 2.3% at $38.89 late Thursday morning. The stock has a consensus price target of $47.37 and a 52-week trading range of $31.69 to $46.59.
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