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Chicago, Illinois – August 16, 2022 – GameStop GME, AMC Entertainment AMC, and BlackBerry BB were featured in a Zacks Investment Ideas feature today.
Meme Stock Mania: Is there still gas in the tank?
One of the most interesting stories in the market over the past few years has been the uprising of the “memetic strain”. out of the bundle game stop It was undoubtedly the most popular and shook the market with a rarely seen short squeeze.
No matter which side you’re on, we can all agree on one thing – it’s been a wild time. It traded in dollars, but after the month ended, it was up more than 1500% at about $325 per share.
Needless to say, long-term investors were rewarded quite well and day traders were in paradise. For shortsellers, it was a nightmare.
Simply put, it was the roller coaster that many market participants decided to ride.
In addition to GameStop, some other memestock include: AMC Entertainment When Blackberry.
Some people probably don’t realize it, but these stocks have been hot for a while now. The buyer has seen a notable gain, especially in his AMC stock. Now that the attention has returned, a legitimate question arises. How do these companies line up today? Let’s take a closer look.
game stop
GameStop currently has a Zacks rank of #4 (selling) with an overall VGM score of F.
Still, Zacks Consensus EPS estimates pencils at -$1.50 in FY23, a 32% year-over-year decline in revenue.
However, the company’s top line is projected to register solid growth.
The end result is less than desirable as of late, with GameStop scoring 4 consecutive EPS misses and an average timeframe surprise of -250%. Topline results have strengthened significantly and the company continues to generate revenue.
Blackberry
BlackBerry boasts a Zacks rank of #3 (hold) with an overall VGM score of F.
The company’s final forecast hints at some weaknesses. BB’s Zacks consensus EPS estimate of -$0.23 for the current fiscal year (FY23) reflects a significant 130% year-over-year decline in earnings.
BlackBerry’s top line is expected to be hit as well. Zacks Consensus has estimated sales of $690 million for his FY23, marking a slight 3.9% year-over-year decline from $718 million in sales for FY22.
Additionally, the company has largely reported higher-than-expected EPS, beating Zachs consensus estimates in seven of the last ten quarters. However, BB failed to achieve a 25% net profit in just the most recent quarter.
AMC Entertainment
AMC Entertainment holds Zacks Rank #3 (hold) with an overall VGM score of D. Over the past 60 days, analysts have sharply lowered their earnings forecasts.
Unlike GME and BB, AMC’s forecast shows strong growth in both sales and profits.
For the company’s current fiscal year (FY2022), the Sachs consensus EPS estimate of -$1.38 reflects a 45% year-over-year increase in revenue.
Fiscal year 2022 revenue forecast is $4.3 billion in pencil, a massive 71% year-over-year increase.
AMC has seen solid consistency in recent earnings, beating Zacks consensus EPS estimates in four of the last five quarters. In its latest print, the company posted a solid 11% return on him.
Top-line results have been largely mixed, with the company posting just five revenue increases in the last 10 quarters.
Conclusion
It might surprise some to find that the memetic strain has been hot for some time and buyers are back in droves. During the action-packed period, these stocks were the hottest items on the block.
From a trading perspective, the volatility of these stocks is a pipe dream. But a long-term investor with a much bigger picture in mind would not find these risky stocks all that attractive.
Of the three mentioned above, AMC is the only company projected to record year-over-year growth in both sales and profits. Still, each company’s shareholders have been rewarded handsomely over the past three months.
The key points are: Market participants should be well aware of the rollercoaster that memetic stocks can bring.
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