GameStop (GME): Stock Rising Ahead of Earnings Results

PC Game

Can GameStop Stock Keep Rising After Earnings?

GameStop Corp. (GME) shares closed 3.58 percent higher on Wednesday, and advanced even higher in after-hours trading, ahead of the company’s 1Q16 results, due out after today’s close.

Wall Street is expecting the video game retailer to report earnings per share of $0.61 and revenue of $1.97 billion. That would be $1.79 lower the $2.40 per share posted last quarter and $0.07 lower the $0.68 posted in the Q115. Revenue is projected to be $90 million lower than the $2.06 billion posted in the same period a year earlier. Meanwhile, reports a whisper number of $0.62 per share.

As a quick reminder, GameStop reported Q415 EPS of $2.40, $0.15 better than the Street’s consensus estimate of $2.25. Revenues increased 1.44% year-over-year to $3.53 billion versus the $3.57 billion consensus. On average, analysts anticipate that GameStop Corp. will post $4.00 EPS for the current fiscal year. With that EPS the company should have no problem increasing a $1.48 per share payout to its passive investors that currently works out to a 5.20% yield.

On valuation measures, GME shares are currently priced at 7.87x this year’s forecasted earnings, compared to the industry’s $3.65x earnings multiple. Ticker has a forward P/E of 6.96 and a trailing-12 price-to-sales ratio of 0.32. EPS for the same period is $3.78.

The Bottom Line

In the past 52 weeks, shares of Grapevine, Texas-based $3.09 billion market cap company have traded between a low of $24.33 and a high of $47.83. Shares are down 21.72% year-over-year ; up 7.24% year-to-date.

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About Ari Haruni 158 Articles
Ari Haruni is the Co-Founder & CEO of Wall Street Pit.

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