GameStop Corp GME Stock Price, Quote & News
That’s the lesson to draw on this, the third anniversary of the meme-stock frenzy that captured retail investors’ attention in January 2021. That was the month, you may recall, in which retail british pound sterling to swiss franc exchange rate convert gbp investo… And it has been a short-term speculative winner in early 2021. Many investors who were in GME stock early clearly won big. For SwingTrader performance, we use a model portfolio.
Shorts only control 9% of GME stock now, says S&P Global Market Intelligence, down from roughly 90% in early 2021. That’s still higher than the typical low single-digit short position, but nowhere near what it was. If you liked this idea, sign up for a no-obligation free trial of my Seeking Alpha Marketplace service, Timely Trader!
You may roll your eyes and think that’s obvious, but for GameStop, it absolutely needs a strong top line performance to help its margin situation. This is not simply about a higher top line; it’s about operating leverage, and that’s what I’m watching. Investors were notified in December that GameStop is trying to become a mutual fund of sorts, noting it altered its investment policy to include any stock it wants to buy.
- The stock is still up more than 700% this year.
- I last covered the stock ahead of the Q3 report nearly four months ago, and at the time, shares had rallied hard into the report.
- As always, valuation is in the eye of the beholder, so it’s subjective, but I don’t see this as a reason to buy the stock ahead of earnings.
- Notice that since 2020, SG&A costs have actually been higher than gross margins, which is completely unsustainable for any business.
- Investors betting the stock would fall, the shorts, controlled GME stock shares in late 2019.
And while the stock is down 68% from its January highs, but it’s still been an amazing run for GameStop (GME) investors. GameStop doesn’t have sustainable earnings, so we cannot value it that way. However, we can value it using price-to-sales, and we’ll do that below to get a sense of what we’re dealing with.
GameStop Discloses Third Quarter 2023 Results
The fact that this didn’t work surprises no one, but it does speak to what I view as desperation on the Board’s part of trying literally anything to generate revenue. Shares of GameStop Corp. rose 5.2% Monday, as the video-game retailer and original meme-stock darling resumed its recent rally. The first trading day of the New Year is setting up as a challenge to the Santa Rally theory, as stock index futures tilt south and bond yields rise. GameStop (GME) short interest has fallen, but does the electronics company still have profitability issues ahead of its earnings report? George Tsilis says that GameStop seems to be stabilizing financ… The stock market will be closed on Good Friday.
It’s another weak quarter following years of decline. The company’s EPS growth rate started declining consistently in 2017 and turned into outright losses for fiscal 2021, which ended in January. Meanwhile, GME stock’s sales posted an 18% annualized drop in the past three years. The massive short interest that primed GME stock for a rally is fading. The stock rally helped GameStop retire its massive pile of debt.
It’s P/S ratio is currently 0.73, which is well down from its average in the past year, as we can see above. The logic there is that each dollar of sales is more valuable as margins rise, which would lead to a higher P/S ratio, all else equal. Shares of video game retailer and original meme stock GameStop Corp. are on pace to register their biggest daily percentage decline since early December. What I’m looking for in the report is a couple of things. First, revenue is obviously absolutely critical.
Shares of GameStop Corp. ended Monday’s session down 8.6%, with the stock registering its biggest daily percentage decline in two months. And yet, the stock’s finding of support at the 10-week line might make it a highly speculative https://www.day-trading.info/how-to-day-trade-stocks-in-two-hours-or-less/ play for those who believe in the turnaround. It’s just all the more vital to not hold too much, and subject your portfolio to excessive risk. And it explains why GME stock carries a perfect 99 IBD Relative Strength Rating.
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Revenue, too, is seen falling 4% to $5.8 billion. GameStop’s top line is benefiting from sales of high-demand next generation Xbox and PlayStation consoles this year. These products, though, are sold at low profit margins. GameStop used to hold an important position in the video gaming industry. It was the spot to buy the latest video game consoles and games.
Why Did GME Stock Go Up?
And revenue should rise 12% to $6 billion vs. last year’s 21% skid. GME stock is rising as investors think it can pull off an amazing business turnaround. GameStop is seen https://www.topforexnews.org/software-development/what-is-a-database-administrator-explore-the/ losing money in 2021, a big blow to the fundamental story of GME stock. GME stock helped kick off the lucrative “short squeeze” rally that took off in early 2021.
But now it’s up to earnings, new products and services, industry group leadership, institutional buying and the market’s direction to tell you if this is a stock to buy now. As always, valuation is in the eye of the beholder, so it’s subjective, but I don’t see this as a reason to buy the stock ahead of earnings. The key is going to be SG&A costs, which we can see above in relation to gross margins. Notice that since 2020, SG&A costs have actually been higher than gross margins, which is completely unsustainable for any business.
To keep things simple, eight full positions of equal weight put us at 100% invested. It’s a number suggested by IBD Founder William J. O’Neil in his book “How To Make Money In Stocks.” That means a full position starts out at 12.5%. The stock is still up more than 700% this year.