TLDR:
- GameStop stock dipped 1.04% to $26.70, underperforming the broader market
- GME has gained 14.81% over the past month, outpacing both its sector and the S&P 500
- Analysts expect positive earnings growth with a Zacks Rank #1 (Strong Buy) rating
- Strive Asset Management pushed GameStop to embrace Bitcoin, with plans for a $1.5 billion convertible note
- After GameStop’s Bitcoin move, Strive is now targeting Intuit to follow a similar strategy
GameStop shares closed at $26.70 in the most recent trading session, reflecting a 1.04% decrease from the previous day. This performance lagged behind the S&P 500’s more modest daily loss of 0.17%.
Despite the daily dip, GameStop has shown impressive momentum over the past month. The video game retailer’s stock has surged 14.81% during this period.
This monthly gain stands in stark contrast to both the Consumer Discretionary sector’s 6.68% decline and the S&P 500’s 3.94% loss over the same timeframe.
Investors are keeping a close eye on GameStop’s upcoming earnings report. Analysts project earnings of $0.08 per share, which would represent a year-over-year growth of 166.67%.
However, revenue expectations tell a different story. The consensus estimate predicts revenue of $750 million, indicating a 14.95% decrease compared to the same quarter last year.
Earnings Outlook and Analyst Sentiment
For the full year, analysts forecast earnings of $0.47 per share and revenue of $3.4 billion. These figures represent a 42.42% increase in earnings but an 11.06% decrease in revenue compared to the previous year.
Recent analyst revisions for GameStop have been positive. Within the past 30 days, the consensus EPS projection has moved dramatically higher by 161.11%.
This favorable revision has contributed to GameStop’s current Zacks Rank of #1 (Strong Buy). The Zacks Rank system has an impressive track record, with #1 stocks generating an average annual return of +25% since 1988.
From a valuation perspective, GameStop trades at a Forward P/E ratio of 57.4. This represents a premium compared to its industry’s average Forward P/E of 15.51.
Bitcoin Strategy Emerges
In a surprising development, GameStop has embraced Bitcoin as part of its corporate strategy. This move comes after pressure from Strive Asset Management, led by CEO Matt Cole.
GameStop has confirmed plans to hold Bitcoin and has announced a $1.5 billion convertible note offering. This makes the retailer one of the first major U.S. companies to adopt a Bitcoin treasury strategy.
The Bitcoin pivot appears to be part of a broader trend. Companies that signal openness to cryptocurrency are seeing market rewards.
For example, Hong Kong-based HK Asia Holdings saw its stock nearly double in a single day after merely indicating it was considering a Bitcoin purchase.
Strategy (formerly MicroStrategy) provides another case study. The company now holds over 531,000 Bitcoin, worth more than $36 billion, and has become a Bitcoin proxy on public markets.
Strive Asset Management isn’t stopping with GameStop. CEO Matt Cole has now targeted financial software giant Intuit, urging it to adopt Bitcoin as a strategic hedge.
In a letter dated April 14, Cole criticized Intuit’s email service Mailchimp for what he described as “anti-Bitcoin censorship.” He claimed the platform deactivated a university Bitcoin club account simply for mentioning Bitcoin.
Cole argued that Intuit should consider adding Bitcoin to its corporate balance sheet, citing the risk that AI could eventually disrupt core products like TurboTax and QuickBooks.
“TurboTax has a high risk of being automated away by AI,” Cole stated. “A Bitcoin war chest is the best option available.”
GameStop’s upcoming earnings report will likely provide more clarity on how its Bitcoin strategy is affecting its financial position. Investors will be watching closely to see if the cryptocurrency move translates into tangible benefits for shareholders.
The video game retailer’s stock currently sits at $26.70, with analysts maintaining their Strong Buy consensus rating despite the recent daily dip.
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