GameStop Corporation (GME - Analyst Report) is slated to report third-quarter fiscal 2013 results on Nov 21, 2013. In the last quarter, it posted a positive surprise of 125%. Let us see how things are shaping up for this announcement.
Factors this Past Quarter
GameStop posted better-than-expected second-quarter fiscal 2013 results, driven by strong performance in the digital and mobile businesses, effective cost management, gross margin improvement and a gain in market share.
Our proven model does not conclusively show that GameStop is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: ESP for GameStop is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 58 cents.
Zacks Rank #2 (Buy): GameStop’s Zacks Rank #2 (Buy) lowers the predictive power of ESP. The Zacks Rank #2 when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:
Hanesbrands Inc. (HBI - Analyst Report) , Earnings ESP of +1.11% and a Zacks Rank #1 (Strong Buy).
The J. M. Smucker Company (SJM - Analyst Report) has an Earnings ESP of +0.63% and a Zacks Rank #2 (Buy).
Michael Kors Holdings Limited (KORS - Analyst Report) , Earnings ESP of +1.16% and a Zacks Rank #3 (Hold).