Gamestop Q4 earnings preview: Can the company pivot to digital?
Matt Weller, CFA, CMT March 23, 2021 1:24 AM
Get our rundown of the key news to know ahead of Gamestop's highly-anticipated earnings report!
As my colleague Josh Warner noted earlier today, Gamestop (GME) remains the single most mentioned stock on the WallStreetBets subreddit, a proxy for retail trading interest. In addition to the stock’s “David vs. Goliath” storyline and day-to-day volatility, traders will also be keeping a close eye on the company’s Q4 earnings release later this week. Get our rundown of the key news to know below:
When are Gamestop earnings?
Tuesday, March 23 after the closing bell
Gamestop earnings expectations
$1.35 in EPS on $2.2B in revenues in Q4 (Factset)
Gamestop earnings: What to watch
Without putting too fine of a point on it, Gamestop completely missed the video game industry’s transition to digital sales and distribution, a catastrophic oversight that left the company on the brink of bankruptcy last year. While the stock’s massive short squeeze at the start of the year was entirely outside of the company’s control, management has catalyzed some changes that have boosted shares. Last month, Gamestop announced that it had brought on Matt Francis, a former engineering leader from Amazon Web Services, as its first-ever Chief Technology Officer. Later in February, the company announced its Chief Financial Officer Jim Bell would be resigning, another development that helped boost the stock.
While actual fundamental operating developments are still playing second fiddle to speculative interest in the stock, the biggest factor to watch in this quarter’s earnings report will be the company’s vision for transitioning into a more digitally-focused retailer in the coming quarters.
Gamestop technical analysis
Turning our attention to the chart, the stock is in the midst of a secondary surge after dropping more than 90% through the month of February. If traders are unimpressed by tomorrow’s earnings report, or risk appetite in the stock dries up for any reason, a break below previous support at $175 could hint at a deeper selloff into the lower $100s in the coming days. Meanwhile, a bullish break above the 1-week high near $225 would be the first sign that bulls may try to push the stock back toward the March highs above $300 next.
Source: StoneX, TradingView
Learn more about equity trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.