Meme stock – GameStop (NYSE:GME) – is set to release its earnings on Tuesday, June 10, 2025. Historically, GameStop's stock has exhibited a favorable one-day return in 55% of cases following earnings announcements over the last five years. The average positive return has been 10.2%, with the highest one-day gain reaching 35.2%.

For traders focused on events, grasping these historical trends can prove advantageous, although actual outcomes relative to consensus estimates will largely dictate the stock's trajectory. Here are two strategies for trading GameStop's earnings:

GameStop has considerably broadened its operations beyond conventional brick-and-mortar video game sales. The company now provides a mix of physical and digital products, including consoles, collectibles, and digital games, and has even entered the realm of cryptocurrency investments, notably acquiring 4,710 bitcoins recently, valued at over $500 million.

For the forthcoming earnings report, analysts forecast earnings of $0.08 per share with sales totaling $754 million. This stands in contrast to a loss of $0.12 per share on sales of $882 million during the same quarter last year. From a fundamental perspective, GameStop has a market capitalization of $13 billion at present. Over the past twelve months, the company recorded revenue of $3.8 billion, an operating loss of $16 million, and a net income of $131 million.

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Some insights into one-day (1D) post-earnings returns:

Additional information regarding observed 5-Day (5D) and 21-Day (21D) returns following earnings is compiled in the table below.

A relatively lower-risk strategy (although ineffective if the correlation is minimal) involves understanding the relationship between short-term and medium-term returns post earnings, identifying a pair with the strongest correlation, and executing the suitable trade. For instance, if 1D and 5D display the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on both 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and subsequent 5D returns.

Occasionally, the performance of peers can affect the stock’s reaction after earnings are reported. Indeed, the market's pricing may start prior to the earnings announcement. Below is some historical data comparing GameStop's post-earnings performance with the stock performance of peers that reported earnings just before GameStop. For a fair comparison, peer stock returns also denote post-earnings one-day (1D) returns.

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