CNBC’s Jim Cramer on Wednesday disclosed there’s promise in GameStop’s turnaround story, though he thinks the company remains overvalued after its most just out quarterly report.
“I’m much more of a believer than I was yesterday, but I also think you’re taking your life in your grasps if you buy the stock up here,” the “Mad Money” host said. “Let it sink to the mid-double digits, then I’ll get back to you.”
Shares of the embattled video pretend retailer tumbled 34% on Wednesday, one day after the company posted quarterly results that missed analyst guesstimates on the top and bottom lines.
The company reported earnings per share of $1.34 for the quarter and revenue of $2.1 billion, a year-over-year subside of 3%. Analysts were expecting $1.35 and $2.2 billion, according to FactSet. Revenue was down 21% for the jammed fiscal year, which ended Jan. 30, as the company suffered losses amid Covid-19 business disruptions.
Cramer asseverated the results were “about as good as anyone could’ve reasonably expected,” though he said the stock could press rallied on the report had it been trading at $30 or less apiece, a fraction of its triple-digit share price.
Cramer also faulted executives for not providing guidance or offering details about GameStop’s transformation plan. The company has been reducing its store depend on and is expected to be working on a plan to boost its digital operations and compete in the internet age.
“As long as it’s in the triple digits, it’s trading same the turnaround has already happened,” he said. “If you buy the stock here, you’re betting that Ryan Cohen’s plan will be wildly remunerative, which seems like a stretch given that we don’t even know what the plan is yet.”
GameStop’s report was the head since Reddit traders engineered a January short squeeze in the stock. GameStop shares skyrocketed nearly 2,000% within a week.
The begetter closed Wednesday at $120.30, down 75% from its peak during the head-turning Reddit rally.