GameStop (GME) will report quarterly results on Wednesday after the bell. The video game retailer is expected to post a loss of 67 cents per share on revenue of $1.12 billion. Perhaps more important than the results, investors will be looking for any clues about the company’s transformation strategy.
GameStop went through a C-suite overhaul after Ryan Cohen, the co-founder of e-commerce platform Chewy (CHWY), joined the board in January and became chairman in June. Cohen, known as “Papa Cohen” by the “meme” crowd, has said he’s not ready to reveal specifics about his strategy yet.
“We are trying to do something that nobody in the retail space has ever done,” said Cohen at the company’s annual meeting in June.
Wedbush analyst Michael Pachter has an Underperform rating and $50 price target on GameStop. He isn’t optimistic investors will hear details about Cohen’s transformation strategy during Wednesday’s earnings call.
“I … am waiting for his brilliant strategy, and it’s not going to be brilliant. If it was brilliant, then he would have let us know, months and months and months ago,” Pachter told Yahoo Finance in a phone interview.
“He’s trying to revolutionize an industry that has already passed him by. He’s audacious, and he’s wrong on this one,” added the analyst.
Pachter is one of a handful of analysts still covering GameStop. Some have stopped coverage since the ‘meme’ stock craze took off.
Year-to-date the stock is up around 950% following a massive short squeeze in January spurred by Reddit’s WallStreetBets traders. Six months after the GameStop saga, GME continues to be a retail trader favorite.
In June, Jeffries analyst Stephanie Wissink noted “the company’s social, PR, and individual investor focus is a sign of clear recognition of their audience. The gamer remains a strong supporter – both as a consumer and investor.”
Wissink designated a Hold rating with a $190 price target on the stock.
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