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In the latest market close, GameStop (GME) reached $28.39, with a +1.21% movement compared to the previous day. The stock exceeded the S&P 500, which registered a gain of 0.73% for the day. Elsewhere, the Dow saw a downswing of 0.64%, while the tech-heavy Nasdaq appreciated by 1.61%.
Coming into today, shares of the video game retailer had gained 3.97% in the past month. In that same time, the Consumer Discretionary sector gained 16.16%, while the S&P 500 gained 9.07%.
Investors will be eagerly watching for the performance of GameStop in its upcoming earnings disclosure. On that day, GameStop is projected to report earnings of $0.08 per share, which would represent year-over-year growth of 166.67%. Our most recent consensus estimate is calling for quarterly revenue of $750 million, down 14.95% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $0.47 per share and a revenue of $3.4 billion, demonstrating changes of +42.42% and -11.06%, respectively, from the preceding year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for GameStop. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. GameStop is holding a Zacks Rank of #1 (Strong Buy) right now.
Investors should also note GameStop's current valuation metrics, including its Forward P/E ratio of 59.68. Its industry sports an average Forward P/E of 18.3, so one might conclude that GameStop is trading at a premium comparatively.
The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 136, which puts it in the bottom 45% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.