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GameStop (GME) to Post Q1 Earnings: What's in the Cards?
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GameStop Corp. (GME - Free Report) is slated to report first-quarter fiscal 2017 results on May 25, after the closing bell. In the preceding quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 3.9%.
Notably, the company surpassed the Zacks Consensus Estimate with a positive earnings surprise of 5.1% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is whether GameStop will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 49 cents, reflecting a year-over-year decrease of nearly 26%. We note that the Zacks Consensus Estimate has witnessed downward revisions in the past 30 days. Analysts polled by Zacks expect revenues of $1,890 million, compared with $1,972 million reported in the prior-year quarter.
We note that the stock has underperformed the Zacks categorized Retail-Consumer Electronic industry in the past three months. The company’s shares have declined 8.5%, while the Zacks categorized industry has gained 13.8%.
Factors at Play
The challenging retail landscape, aggressive promotional strategies, waning store traffic and lower-than-expected top-line for the third consecutive quarter have been weighing on the performance. GameStop’s basic concern is the weakness prevailing in new software sales, which is heightening apprehensions about the impact of digital downloads on the same. New software sales witnessed 19.3% decline in fourth-quarter fiscal 2016. In fiscal 2017, the company expects new software sales to decline mid-single digits.
Meanwhile, GameStop’s foray into the collectibles and licensed merchandising category, and Technology Brands has been profitable. During the fiscal fourth quarter, the collectibles business sales surged 27.8% to $212.4 million buoyed by robust sales of Pokémon-related toys and apparel.
What Does the Zacks Model Unveil?
Our proven model does not conclusively show that GameStop is likely to beat on earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. GameStop has an Earnings ESP of +2.04% as the Most Accurate estimate is at 50 cents, while the Zacks Consensus Estimate is pegged lower at 49 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GameStop carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into earnings announcement, especially when the company is seeing negative estimate revisions.
Gamestop Corporation Price, Consensus and EPS Surprise
Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #2.
Ulta Beauty, Inc. (ULTA - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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GameStop (GME) to Post Q1 Earnings: What's in the Cards?
GameStop Corp. (GME - Free Report) is slated to report first-quarter fiscal 2017 results on May 25, after the closing bell. In the preceding quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 3.9%.
Notably, the company surpassed the Zacks Consensus Estimate with a positive earnings surprise of 5.1% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is whether GameStop will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 49 cents, reflecting a year-over-year decrease of nearly 26%. We note that the Zacks Consensus Estimate has witnessed downward revisions in the past 30 days. Analysts polled by Zacks expect revenues of $1,890 million, compared with $1,972 million reported in the prior-year quarter.
We note that the stock has underperformed the Zacks categorized Retail-Consumer Electronic industry in the past three months. The company’s shares have declined 8.5%, while the Zacks categorized industry has gained 13.8%.
The challenging retail landscape, aggressive promotional strategies, waning store traffic and lower-than-expected top-line for the third consecutive quarter have been weighing on the performance. GameStop’s basic concern is the weakness prevailing in new software sales, which is heightening apprehensions about the impact of digital downloads on the same. New software sales witnessed 19.3% decline in fourth-quarter fiscal 2016. In fiscal 2017, the company expects new software sales to decline mid-single digits.
Meanwhile, GameStop’s foray into the collectibles and licensed merchandising category, and Technology Brands has been profitable. During the fiscal fourth quarter, the collectibles business sales surged 27.8% to $212.4 million buoyed by robust sales of Pokémon-related toys and apparel.
What Does the Zacks Model Unveil?
Our proven model does not conclusively show that GameStop is likely to beat on earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. GameStop has an Earnings ESP of +2.04% as the Most Accurate estimate is at 50 cents, while the Zacks Consensus Estimate is pegged lower at 49 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GameStop carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into earnings announcement, especially when the company is seeing negative estimate revisions.
Gamestop Corporation Price, Consensus and EPS Surprise
Gamestop Corporation Price, Consensus and EPS Surprise | Gamestop Corporation Quote
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here
Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #2.
Ulta Beauty, Inc. (ULTA - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>