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Will GameStop Beat Again?

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We expect GameStop Corporation (GME - Free Report) , an S&P 500 company, to beat expectations when it reports fourth-quarter fiscal 2012 results on Mar 28, 2013.

Why a Likely Positive Surprise?

Our proven model shows that GameStop is likely to beat earnings because it has the right combination of two key components.  

Positive Zacks ESP: GameStop currently has an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +0.95%. This is because the Most Accurate Estimate stands at $2.12, while the Zacks Consensus Estimate is pegged at $2.10.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings estimates. The sell-rated stocks (Zacks Rank #4 and #5) should never be considered going into an earnings announcement.

The combination of GameStop’s Zacks Rank #3 (Hold) and +0.95% ESP make us very confident regarding a positive earnings beat on Mar 28.

What is Driving the Better than Expected Earnings?

GameStop is well positioned to take the advantage of growing market for video game products and PC entertainment software. GameStop continued to branch out and transformed as a mixed retailer of physical and digital gaming and electronics products. The company’s venture in digital, iDevice and gaming tablet businesses would be accretive to its results. The company’s buy-sell-trade model of selling new games and buying back used games and PowerUp Rewards program makes it a popular destination for shopping.

The positive trend is seen in the trailing four-quarter average surprise of 11.2%.

Other Stocks to Consider

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 this quarter:

Cabela's Incorporated , Earnings ESP of +5.46% and Zacks Rank #1 (Strong Buy).

Flowers Foods, Inc. (FLO - Free Report) , Earnings ESP of +5.13% and Zacks Rank #1 (Strong Buy).

Kraft Foods Group, Inc. , Earnings ESP of +4.69% and Zacks Rank #2 (Buy).

In-Depth Zacks Research for the Tickers Above

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GameStop Corp. (GME) - free report >>

Flowers Foods, Inc. (FLO) - free report >>

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