GameStop Stock (GME) Bounces Into Earnings, Underwater YTD

GameStop's stock (NYSE:GME) is trading flat today through the early part of the session, yet has built a little momentum in recent weeks, adding 8.9% on the month leading into today's earnings. Despite the near term bounce, GME remains 23.65% lower than where it began the year, leaving many questioning whether we have seen a bottom.

Analysts are projecting an EPS of $0.20 for the upcoming quarter, a jump on the $0.06 per share seen this time last year. Revenue is expected to come in at $987.28 million, 14.76% higher Y/Y.

The current price hovers above the 50-day simple moving average (SMA) of $22.92 but remains below the 200-day SMA of $24.46. This technical setup suggests short-term bullish sentiment countered by a longer-term bearish trend.

Several recent events have significantly impacted GameStop's stock. In October, insider Daniel William Moore sold 6,509 shares at an average price of $27.58, totalling $179,518.22. This insider sale coincided with a stock price decline and a “strong sell” rating from Wedbush, contributing to a consensus price target of $13.50. Despite this, GameStop reported a $0.25 EPS for the most recent quarter, surpassing estimates, with revenues up by 21.8% year-over-year.

A notable strategic move in May saw GameStop acquire 4,710 bitcoins, valued at approximately $515 million. This foray into cryptocurrency initially boosted the stock by over 6%, reaching $35.84. However, the enthusiasm waned, and the stock retreated, reflecting investor apprehension about the company's strategic shift into Bitcoin.

The convergence of these factors paints a complex picture for GameStop. The company's strategic initiatives, including its foray into cryptocurrency and equity offerings, have been met with mixed reactions from the market.

Whichever way you are watching this one, prepare for potential volatility, with the options market data indicating a 50% probability of a price swing exceeding 9.24% off the back of the print.