GameStop Stock Price Fails To Capitalize On Strong Q2 2021 Revenue Stream

GameStop (GME) stock price failed at $200 after the Q2 2021 earnings report. The Q2 2021 EPS missed by $0.09, but the company reported stronger than expected revenues.

GameStop released its Q2 2021 financial results yesterday. The company missed on the EPS estimates but reported strong sales growth and, thus, much stronger revenue.

The stock price’s reaction was mixed – failing at $200 but keeping the series of higher highs and higher lows seen recently.

Highlights of GameStop Q2 2021 Earnings

One of the biggest surprises came from the net sales generated for the quarter – up to $1.183 billion, higher than the $942 million reported in the same period last year. Also, the company’s cash and restricted cash position improved, reaching $1.78 billion.

Long-term debt declined, and the company has none of it at present. Moreover, GameStop has invested in adding new items to its product catalogue and entered into leases in the United States with the intention of building  U.S.-based customer care operations.

GameStop stock price is up +2,481.82% in the last 12 months and +955.20% this year alone. The company operates with a gross profit margin of 24.45%, much lower than the 35.67% sector median, and has a price/sales ratio for the last 12 months of 2.43.

Having said that, the company keeps losing money, albeit not that much as compared to the same period last year. The net loss fell to -$61.6 million from -$111.3 million.

GameStop stock price performance this year and in the last 12 months has nothing to do with the company’s financial performance. Instead, the shares were benefiting from a short-squeeze triggered by a large group of retail traders organised on a social media platform who bought in unison. 

Disclaimer: None of the content in this article should be viewed as investment advice or a recommendation to buy or sell. Past performance/statistics may not necessarily reflect future ...

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