GameStop shares fall after missing Q4 earnings estimates
GameStop (GME) shares dive in extended-hours hours after missing fourth-quarter earnings estimates, falling short of both revenue — posting $1.79 billion versus an expected $2.05 billion — and adjusted EPS — $0.22 per share versus expected gains of $0.30 per share — forecasts.
Yahoo Finance Live breaks down GameStop shares' journey since the meme stock frenzy of early 2021.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
[AUDIO LOGO]
AKIKO FUJITA: We are watching shares of GameStop plummeting after the company sales and adjusted earnings per share during the fourth quarter missed the Street's expectations. You see the stock down nearly 15% right now. Josh, running us through the numbers here in the fiscal fourth quarter GameStop. Reported adjusted earnings of $0.22 a share.
The Street was expecting much more than that. $0.30 a share is what we're looking at. The company's revenue coming in at $1.79 billion. That also below expectations.
But I wonder if we bring this back to what we were talking about with, Josh, and Myles earlier today. Because yes, we are seeing a big sell off on the back of those results. But when you think about where GameStop is fundamentally, you have to argue the story hasn't necessarily changed since we were talking about it as sort of a memeified stock.
What is the strategy in place for this company's turnaround? But yet Myles earlier talking about just how much we have seen a run up in GameStop. So this is obviously investors doing what they do. But just have to wonder, is this just kind of a reaction to the run up that we saw? This being brought down to Earth with the numbers that we got. It's a bit of a reality check.
JOSH LIPTON: Yeah, because your question on the fundamentals, Akiko, is a good one. I mean, the bear thesis is kind of still the same on this, which is that the industry has fundamentally shifted its digital, its streaming, its subscription services. And they'll argue that these are just big broad forces working against this name.
And so maybe not surprising. Also by the way, we should note, I mean, it had already gotten hit pretty hard heading into this print. It was already down about 15% this year. It's down about 30% over the past 12 months. And now, still heading lower here sharply in the after hours.
AKIKO FUJITA: Now the thing to watch here is, OK, we see a sell off on the back of these results. Where does this stock go from here? We're talking about just the exuberance that we've seen in the market. It's one of those stocks that have benefited on the back of that.
JOSH LIPTON: For sure.
