Besides being subjected to speculative traders, GameStop has experienced an increase in demand for its products since the onset of the coronavirus pandemic.
GameStop Corporation (NYSE: GME) stock continues to experience heightened volatility as speculative traders fuel the ongoing bull rally. Notably, after closing Friday trading at $65.01, up 51.08%, GameStop stocks are up approximately 44% during Monday’s pre-market to trade around $94.11.
GameStop’s market perspective changed after the coronavirus was declared a global pandemic earlier last year. As a result, GameStop shares surged approximately 1,418% last year according to data provided by MarketWatch. In addition, they have added approximately 383.95%, 209.72%, and 83.13% in the past three months, one month, and five days respectively.
Reportedly, the high volatility on GameStop stock caused trading to be halted on the New York exchange on Friday several times. Trades have managed to exchange more than 193 million GameStop shares since Friday, recording the highest since the company went public two decades ago.
According to news outlet Barrons, a group of Reddit traders is responsible for the meteoric rise in GameStop stocks. More traders have been betting on the exponential growth in GameStop shares bolstered by the underlying fundamentals.
GameStop Stock Performance
Besides being subjected to speculative traders, GameStop has experienced an increase in demand for its products since the onset of the coronavirus pandemic. With more people adhering to the stay-at-home order, the more they crave video game products. Hereby putting GameStop in a position of significantly bagging more profits over time.
The continued growth in GameStop stocks was not necessarily reflected during the past quarterly earnings reported on December 07, 2020. GameStop reported earnings per share of $0.53, whereas analysts had anticipated EPS of $0.85. Besides, the company reported a revenue of $1 billion in comparison to the consensus estimate of $1.09 billion. Interestingly, GameStop’s revenue had dropped approximately 30.2% on a year-over-year basis. Although not officially confirmed, investors and analysts are expecting the next quarterly earnings to be announced on March 25, 2021. Once released, GameStop analysts can have a better understanding of the company’s market perspective.
Apparently, the analysis suggests that GameStop will report average earnings per share of $1.08 during the first quarter of 2021. That would reciprocate to almost a double from its past earnings report.
GameStop investors and analysts will be closely monitoring the coronavirus vaccine developments. With already some vaccines approved for emergency use in the United States and some other overseas countries, GameStop demand is expected to decline and stabilize accordingly. The company, however, expects further gains bolstered by increased sales in PlayStation 5 and Xbox series X.
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