Gamestop Q4 earnings preview: Can the company pivot to digital?

Get our rundown of the key news to know ahead of Gamestop's highly-anticipated earnings report!

Crypto 10

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.

More from Earnings

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account