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The stock of GameStop Corp. (GME) has a lot to prove next week
If you're wondering why GameStop's stock fell to a new 52-week low this week, it's possible that investors are aware that the video game retailer will release its fiscal fourth-quarter earnings shortly after the market closes on Thursday.
By: Millennium Capital Management Limited
The irony is that the stock has nearly doubled in value over the last three years. Despite hitting a new 52-week low on Monday, the stock has more than doubled in value since the beginning of the year. For investors of the ultimate meme stock, volatility is unavoidable but let's look at why GME has sunk anytime it has genuine performance figures to discuss. If you're a GME shareholder, then you're probably concerned this week. Experienced gamers are adept at identifying trends and the specialized shop has a history of disappointing quarterly financial results.
This translates to a daily decrease of 13.8% on average following each of the previous 13 reports. To make matters worse, the two days when the Bears didn't win aren't exactly inspirational. The stock's lowest swings in either direction in a session following a release during the last three years were a 2.2% gain on its fiscal Q1 2020 report and a 0.2% gain on its fiscal Q2 2021 report. The stakes are high ahead of this week's showdown. Analysts expect net sales to increase by only 4% year over year to $2.22 billion in the holiday-driven fiscal quarter that ended January 30. They also forecast a profit of $0.84 per share, down from $1.34 per share a year ago. Unfortunately for the bulls, even the low targets established by Wall Street experts have been difficult to achieve in recent months. In three of the last four quarters, the bottom line has fallen short of its forecasts.
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