GameStop Corp. GME is slated to report first-quarter fiscal 2015 results on May 28. In the last quarter, the company had delivered a negative earnings surprise of 0.9%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
GameStop’s performance in the quarter to be reported may be impacted by soft sales of previous generation consoles and currency headwinds. Anticipating significant currency headwinds, GameStop provided a cautious outlook for fiscal 2015. Management had earlier projected that unfavorable currency fluctuations would hurt sales by $300–$400 million and earnings by 6–9 cents a share in the fiscal.
Earnings Whispers
Our proven model does not conclusively show that GameStop is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: GameStop currently has an Earnings ESP of +1.72%. This is because the Most Accurate estimate stands at 59 cents and the Zacks Consensus Estimate is pegged at 58 cents.
Zacks Rank: GameStop carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Casey's General Stores, Inc. CASY has an Earnings ESP of +14.29% and a Zacks Rank #1 (Strong Buy).
Tiffany & Co. TIF has an Earnings ESP of +7.25% and a Zacks Rank #3 (Hold).
Burlington Stores, Inc. BURL has an Earnings ESP of +5.00% and a Zacks Rank #3.
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