Wednesday Sep 8 2021 09:43
2 min
Meme stock favourite GameStop (GME) is set to report Q2 results after the market closes on Wednesday, September 8th. The stock, which was at the heart of the Reddit trading frenzy in January, is up more than 1,000% YTD and closed Tuesday’s session at $199, a loss of $3.45, or 1.7%, on the day.
Flush with the proceeds of a recent equity raising, the company has been tackling debt and seen encouraging sales progress, with growth across hardware, accessories and collectibles categories.
Markets expect losses to halve, with the company seen reporting a loss of $0.70 per share vs $1.40 per share seen in the same period a year ago. Revenues are expected to rise 20% year-on-year to $1.1 billion.
In June the company said it would continue to suspend guidance for 2021 due to the pandemic, but said net sales were the best metric to follow. “The company’s second-quarter sales trends continue to reflect momentum, with May total sales increasing approximately 27% compared to last year,” the company stated.
Ultimately though the stock remains disconnected from fundamentals so the price action is more about expectations for the turnaround strategy. Given its propensity for volatility, traders should be willing to expect noisy price action around the results.
On the chart, we can see that after a run lower through June and July the subsequent rally has stalled and there is a clear loss of momentum to the upside. Bulls looking to break $230 to be encouraged at a return to March and June swing highs around the $340-350 level.
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