GameStop Q2 Earnings Preview: Analyst Estimates, Return To Profitability In Focus — Will Investors Get Update On Cash Plans?

GameStop Corp GME investors and analysts will be hoping for more information about the company's financials and future growth initiatives when the company reports second-quarter financial results Tuesday after market close.

Earnings Estimates: Analysts expect GameStop to report second-quarter revenue of $895.7 million according to data from Benzinga Pro.

The company reported revenue of $1.16 billion in last year's second quarter, with analysts predicting a year-over-year decline.

GameStop has missed analyst estimates for revenue in three straight quarters and six of the last 10 quarters overall.

Analysts expect GameStop to report a loss of nine cents per share in the second quarter, which would be a decline from a loss of three cents per share in last year's second quarter.

GameStop has missed analyst estimates for earnings per share in two straight quarters and six of the last 10 quarters overall.

The video game retailer reported a loss of 12 cents in the first quarter, which ended a trend of profitability with the company reported earnings of 22 cents per share in the fourth quarter and break-even in the third quarter.

The earnings report from GameStop comes with shares up 43% year-to-date, as seen on the Benzinga Pro chart below, but after shares pulled back in recent months.

Read Also: GameStop Converts Stores To Retro Retailers To Help Gamers Find Old Nintendo, Sega, Game Boy, PlayStation, Xbox Consoles

What Analysts Are Saying: GameStop receives minimal analyst coverage these days. In June, Wedbush analyst Michael Pachter lowered the price target on shares from $13.50 to $11 along with an Underperform rating.

The lowered price target came with the company raising less money from share offerings than expected due to the timing of a presentation on YouTube by Roaring Kitty (aka Keith Gill).

"Given that GameStop's share price closed at $46 on June 6, we had assumed it would complete the sale at an average price of $40," Pachter said.

Key Items to Watch: GameStop has provided minimal updates and often releases earnings without conducting a conference call.

The second-quarter financial results could show strength in video game sales with the release of EA Sports "College Football 25," a highly anticipated game coming out in July that could be a bestseller.

GameStop could also provide an update on how it plans to use its cash from recent offerings. Investors have been anxiously awaiting the prospect of potential mergers and acquisitions by the video game company or investments thanks to a company rule change in 2023.

The earnings report comes shortly after the social media account of Roaring Kitty shared its first post in months, with investors trying to decipher the clues that could potentially point to the investor selling their stake in Chewy and looking to GameStop once again.

GME Price Action: GameStop stock traded up 2.76% at $24.58 on Monday at publication versus a 52-week trading range of $9.95 to $64.83.

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