GameStop (NYSE:GME) is slated to release its third quarter Fiscal 2022 results on December 7, after the market closes. Based in Texas, GameStop is a retailer of video games, consumer electronics, and gaming merchandise.
Currently, the Street expects GameStop to post a loss of $0.28 per share in Q3, compared with a loss of $0.35 per share reported in the prior-year period. Meanwhile, revenue is expected to remain constant from the year-ago quarter at $1.3 billion.
The meme stock’s quarterly performance might have been impacted by lower demand for its devices and services. According to the market research company, NPD Group, video game sales declined 5% year-over-year in Q3. Also, accessory spending plunged 12%, indicating a weak quarter for the video game industry as a whole.
Nonetheless, the company had announced plans to focus on cost-cutting initiatives, which may have supported the bottom line to some extent in the upcoming quarter.
According to Wedbush analyst Michael Pachter, GameStop continues to face some short-term headwinds, which include “ongoing hardware constraints, the impact of employee turnover, a sluggish start for its non-fungible token (“NFT”) marketplace, and cash burn.” He expects Q3 revenue to grow modestly year-over-year.
Ahead of GameStop’s Q3 earnings release, Pachter maintained a Sell rating on GME stock and a price target of $6 per share.
Is GME Stock a Buy or Sell?
Overall, GameStop has a Moderate Sell consensus rating based on one Hold and one Sell. The average GME stock price target of $16 implies 37.4% downside potential. The stock has tumbled nearly 33.1% year-to-date.
Website Data Reflects a Weak Q3
It’s worth mentioning that the TipRanks website traffic tool hints at a disappointing picture for the quarter. As per the tool, Q3 total estimated visits to gamestop.com fell 17.98% compared to the same period of last year.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
