To The Moon

$GameStop(GME)$ is scheduled to report its third-quarter 2024 earnings on 10 Dec 2024 after market close.

In the last quarter, GME has missed analysts’ revenue expectations by 10.9%, reporting revenues of $798.3 million, down 31.4% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EPS estimates.

This quarter, analysts are expecting GameStop’s revenue to decline 17.7% year on year to $887.7 million, a further deceleration from the 9.1% decrease it recorded in the same quarter last year.

Adjusted loss is expected to come in at -$0.03 per share.

GameStop (GME) Low Debt To Asset In 2024

As we looked at how GME have been able to reduce their liabilities while trying to keep its assets not declining too much, this result in a low debt to asset since 2017, this mean that GME have been able to manage to avoid paying much interest during the period where we saw rate hike in 2023.

So we could expect GME to take on more debt to fund its expansion as we are seeing rate cut progressively being implemented.

GameStop (GME) Year-To-Date Return Is Impressive

GME investors do have something to cheer about as they have gained more than 50% year-to-date in their returns, but if we were to look at how GME have performed over the last two years, it has not beat any consensus forecast.

So will this quarter be different?

GameStop (GME) Ownership - More Than 70% Is Owned By Public Companies and Individual Investors

The ownership structure of GameStop (GME) stock is a mix of institutional, retail, and individual investors. Approximately 29.08% of the company’s stock is owned by Institutional Investors, 0.04% is owned by Insiders, and 70.89% is owned by Public Companies and Individual Investors.

This would mean that the stock movement by this group would be significant even if GME did not manage to beat earnings expectations.

I am expecting there should be some increased trading interest in GME, minus the group who are trading GME as a meme stock, I will also be watching if there is any comment from Roaring Kitty as we have seen how GME soar for a while then drop, after he post a comment.

GameStop (GME) Investors Sentiment Remain Positive

There has been positive sentiment among investors in the specialty retail segment, with share prices up 5.7% on average over the last month. GameStop is up 5.5% during the same time and is heading into earnings with an average analyst price target of $10 (compared to the current share price of $28.77).

Investors have also remained positive with 1.3% increase in portfolios holding GME in last 7 days, and 0.6% increase for the last 30 days.

Technical Analysis - MACD and Multi-timeframe (MTF)

Looking at GameStop’s peers in the specialty retail segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Best Buy’s revenues decreased 3.2% year on year, missing analysts’ expectations by 2%, and Ulta reported revenues up 1.7%, topping estimates by 1.3%. Best Buy traded down 5.2% following the results while Ulta was up 8.9%.

GME does show some strength when we see it continue to trade above the short-term and long-term MA before its earnings result, as compared to the last earnings, it was trading near the short-term MA, and w saw a decline after its earnings.

MACD does project a potential bearish outlook but MTF is giving a strong upward trend signal, so I am expecting this earnings to be similar to last quarter, a mixed result.

Summary

I would be watching the revenue this quarterly reporting as there might be some increased buying ahead of the holiday gifting period, so we might see GME revenue coming in close to the consensus estimate, if not, exceed it.

I had traded in GME before, but will monitor and see if I would want to take a trade if there is strong indication from day session on 10 Dec.

Appreciate if you could share your thoughts in the comment section whether you think GME revenue could beat expectations and provide a surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.