Shares of GameStop (GME) fell in after-hours trading after the video game retailer reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $0.01, which beat analysts’ consensus estimate of -$0.09 per share. However, sales plunged by 31.9% year-over-year, with revenue hitting $790 million. This missed analysts’ expectations by $106 million. In addition, adjusted EBITDA for the quarter was -$18 million versus the $1 million seen in the same quarter during the prior year.
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Interestingly, investors could have anticipated the drop in year-over-year revenue by simply looking at GME’s website traffic. As the image below shows, the number of visitors fell over 46% when compared to the same quarter of last year.
Unsurprisingly, GameStop did not provide a financial outlook, as usual, as management is trying to turn the business around. This makes it difficult to reasonably forecast how the company will perform going forward.
Nevertheless, the company saw free cash flow jump to $65.5 million from the -$119.2 million in Q2 2023 and had $4.2 billion in cash and equivalents at the end of the quarter.
Is GME Stock a Buy, Sell, or Hold?
Turning to Wall Street, only one analyst, Michael Patcher from Wedbush, is covering GME stock. According to him, he sees more than 53% downside for GameStop based on his price target of $11 per share.
