GME Technical Analysis

Gamestop Earnings Results

  • Gamestop stock is barely moving after hours and is trading very close to its close at $121.50.
  • Gamestop revenue for the quarter is $1.4 billion. The consensus estimate was $1.35 billion.
  • Gamestop EPS for the quarter is $2.08 per share. The consensus estimate was a loss of $1.37 per share.
  • The key takeaways for Gamestop Q1 2022 Quarterly Earnings Report are: Continued hiring in blockchain gaming.

When is Gamestop Earnings?

  • Gamestop is reporting today after normal trading hours. That is after market close (AMC) on Wed, June 01, 2022.
  • The name of this earnings report is ‘Gamestop Q1 2022 Quarterly Earnings Report’ and it announces the company’s business results for Nov 2021, Dec 2021 and Jan 2022.
  • The name of Gamestop’s next earnings report is ‘Gamestop Q2 2022 Quarterly Earnings Report’ and it is expected to be announced (unconfirmed) on 01 Sept 2022, for the Quarter ending Apr 2022.

Gamestop Earnings and the Stock’s Expected Move

  • The options market is pricing a 19.5% move (up or down) for Gamestop Q1 2022 Quarterly Earnings.

Could another short squeeze be in the making for Gamestop's Q1 2022 Quarterly Earnings?

Gamestop keeps making the news and if you know anyone who is even remotely social trading, you have probably heard about the GME “MOASS” theory (mother of all short squeezes).

But before we get ahead of ourselves, let’s talk real numbers.

Q4 2021 Earnings Recap

In 2021 many investors were wondering if Gamestop knew what it wanted to be. The company’s Q4 earnings answered with a sound yes.

Here are the major moves for GME for Q4 2021

  • Gamestop expanded its online store and began featuring different products like TVs, PC components, Toys, and so forth.
  • Gamestop also established major partnerships, locking in deals with PC gaming giants like Corsair, Alienware, and Lenovo, all of which contributed to the company’s sales growth.
  • But the partnerships didn’t stop there as GME moved into the crypto-sphere by joining forces with Immutable X and Loopring as the development of the company’s marketplace began.
  • Furthering GME commitment to blockchain tech, the company hired experts in blockchain gaming, tech, and e-commerce.
  • The roadmap for 2022 was also laid out as Gamestop planned to expand its offerings as it began building the Gamestop NFT Marketplace and the Gamestop Wallet.
  • Gamestop generated net sales of $2.254 billion, up from $2.122 billion (Q4 2020), and $2.194 billion (Q4 2019).
  • In terms of PowerUp rewards membership, GME experienced a 32% growth on a YoY basis.
  • Gamestop also revamped its app. GME’s new app is now more user-friendly but also took strides in terms of scalability, product catalogue, and functionality.

Gamestop 2021: some extra notes

Looking back at 2021’s fiscal year, GME generated net sales of $6.011 billion, a staggering extra billion when compared to 2020 ($5.090 billion). It also ended the fiscal year with $915 million in inventory (up from $602.5 million in 2020).

Gamestop raised around $1.67 billion in capital and managed to eliminate all its long-term debt (other than a $44.6 million low-interest, unsecured term loan which is related to the COVID-19 response).

Has the market been sleeping on GME?

To many, Gamestop will forever be a meme stock. To those who follow the company’s move closer, however, Gamestop’s transformation is looking better by the day.

GME has cash in hand, and it stopped being a video game retailer a long time ago (and if you weren’t paying attention, the company’s new hires, like the executives from Amazon, Apple, and Microsoft were a major tell).

In terms of brand, Gamestop developed its image way beyond the dusty old brick-and-mortar stereotype by betting on inventory during a low inflation and low borrow fees environment, and by adding delivery and fulfillment centres.

This move reflects GME’s commitment to meeting demand and mitigating any supply chain setback that may come their way.

Moreover, the company diversified its revenue streams by pivoting into stronger growth fields like the blockchain space. Its marketplace move alone should be a solid growth driver going forward (to contextualize, OpenSea’s valuation is an estimated $13 Billion alone).

Gamestop has cleaned up. It’s leaner, it has cash in hand and nearly no debt. Its move into the crypto-sphere and bet on the $150 billion gaming industry can prove successful in the upcoming years.

But as historical data has shown us, GME tends to be volatile following its quarterly results. And while some still see it as a bet, others see a lot of value which hasn’t been priced in.

Can we see another GME short squeeze?

It is important to understand that previous to this earnings report, Gamestop’s borrow rates have been rising by the day.

The cost to borrow has gone up significantly and, in tandem, GME’s utilization rate has been 100% for more than 70 consecutive trading days.

This means that there might not be any available shares left to short and short sellers need to find other resources to continue shorting if they so wish.

However, those elements alone might not be sufficient to trigger a short squeeze. Buying pressure must be added to the mix so it will all be up to the GME earnings report.

As such, we couldn’t say it better than Ryan Cohen himself: "You might want to buckle up".

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