Gamestop posts profitable quarter for the first time in two years
Gamestop posted their first profitable quarter in two years on Tuesday. The stock rose significantly in pre-market trading on Wednesday.
The success in Gamestop’s earnings report can be likened to their cost-cutting ability.
“We’re aggressively focused on year-over-year profitability improvement while still pursuing pragmatic long-term growth,” CEO Matt Furlong said in a post-earnings call.
We mentioned we like Gamestop stock in our $GME prediction for 2025. Admittedly, we didn’t see a drastic rise this soon.
Gamestop $GME exploding higher by more than 45% after announcing a quarterly profit when the street was expecting a loss pic.twitter.com/vdSSTgNva0
— Barchart (@Barchart) March 21, 2023
Is GameStop stock worth buying now?
So, is Gamestop stock a buy? That depends on if you like to buy the news. I used to trade like this early on in my career, but the biggest profits usually come from selling the news (in my experience).
Still, Gamestop has something that many companies wish they had: community.
The financial Twitter (FinTwit) community absolutely loves Gamestop stock. There’s hundreds of accounts that run solely on the premise of tweeting about $GME daily.
Thus, if you’re looking for an online community and a potential long-term investment, Gamestop could appeal to you.
Congratulations to my fellow $GME shareholders. pic.twitter.com/DblihL5KGK
— Charles V Payne (@cvpayne) March 21, 2023
Also, GME is led by Ryan Cohen, who founded the e-commerce company Chewy, an online pet retailer, and has a solid track record of scaling companies.
If you read Blue Chip Buzz, you’ll know we’re big fans of Chewy and its offerings. Thus, we give a vote of confidence in Cohen’s vision to grow companies.
The video game sector is a hard one to pin down. In 2020, when everyone was at home, it was a no-brainer to invest in video game stocks.
These stocks include companies like Nintendo, Nvidia, Microsoft and Take Two just to name a few. Of course, Gamestop can also be included in this sector, since they are video-game retailers.
However, the gaming sector is in a bit of a lull. Fans of big series like Call of Duty, which is owned by Activision, have been disappointed by the past few releases.
For sports gaming fans, EA has given soccer fans basically the same iteration of the game for the past decade. But, gamers keep buying them.
And, as we shift even further into a digital age, gaming should continue to gain popularity.
Gamestop’s earnings report was impressive. And it signals that the stock could have room to run.
However, all investors and traders must be wary of the financial uncertainty looming in the US.
With that said, enjoy the party while it lasts. And remember, it never hurts to take profits.
