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, EarningsWhisper.com 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.