GameStop Corp ( GME ). could provide a peek at holiday shopping demand when it reports third-quarter earnings after market close Tuesday.

Earnings Estimates: Analysts expect the video game to report third-quarter revenue of $887.7 million. That’s down from $1.08 billion in last year's third quarter, according to Benzinga Pro.

The company reported revenue of $881.8 million and $798.3 million in this year's first and second quarters, respectively. GameStop ( GME ) has missed analyst estimates for revenue in four straight quarters and seven of the last 10 quarters.

Analysts expect the company to report a loss of 3 cents per share for the third quarter — down from breakeven earnings in last year's third quarter. The company reported a loss of 12 cents per share in the first quarter and a profit of 1 cent per share in the second quarter.

GameStop ( GME ) has beaten analyst estimates for earnings per share in five of the last 10 quarters.

Read Also: GameStop Adds Nat Turner To Board: Does The Move Show Bigger Bet On Trading Cards, Grading?

Key Items to Watch: GameStop ( GME ) provides minimal commentary in its earnings reports and has not held a conference call in several consecutive quarters.

Analysts and investors will be looking for indications from the company on how the quarter went, how the next quarter is shaping up and what the company will be doing with its cash going forward. Investors and analysts may not get all these answers on Tuesday.

GameStop ( GME ) ended the second quarter with $4.2 billion in cash, cash equivalents and marketable securities.

For months, investors have wondered what the company will do with the cash, whether it be acquisitions or new investment areas like trading cards and collectibles.

Will GameStop Buy Crypto?

Some investors believe the company should invest in Bitcoin (CRYPTO: BTC). So far, other public companies have purchased the leading cryptocurrency, including MicroStrategy and Tesla.

GameStop ( GME ) quietly made a change to how its cash was controlled in late 2023, giving power to CEO Ryan Cohen.

“On December 5, 2023, the Board of Directors approved a new investment policy that permits the Company to invest in equity securities, among other investments.”

GameStop ( GME ) went on to say that Cohen will direct the investment activity of the company in public and private markets. At times, GameStop ( GME ) and Cohen may be investing in the same companies, according to the filing.

The change allows Cohen to invest GameStop's ( GME ) cash into stocks and cryptocurrency without shareholder or Board approval, but he has yet to do so.

GameStop ( GME ) announcing it had bought Bitcoin would likely be one of the most talked about moments of the year for both the stock market and cryptocurrency sector, but right now it is just a wish for some.

Roaring Kitty, aka Keith Gill, recently tweeted for the first time since September. The tweet caused GameStop ( GME ) stock to trade higher as he has often been linked to the company. The picture of a computer screen with a video playing at the 1:09 minute mark could point to Jan. 9 or something completely different.

While GameStop ( GME ) won't touch on anything related to Gill, the X account of Roaring Kitty will be closely monitored after the company's report to see if he has anything to say about the results.

In the second quarter, GameStop ( GME ) reported year-over-year declines across all three major business segments. Investors and analysts will be looking to see if the trend continues or if any growth is present.

Net sales by segment in the second quarter were as follows (comparable sales from last year’s second quarter in parentheses).

Hardware and Accessories: $451.2 million ($597.0 million)

Software: $207.7 million ($397.0 million)

Collectibles: $139.4 million ($169.8 million)

GameStop ( GME ) will likely not comment on the fourth quarter, which includes the holiday shopping season. Still, investors and analysts are hoping for some color.

Wedbush analyst Michael Pachter said GameStop ( GME ) provided no strategy for its future as it trades at a premium to its cash after the second-quarter earnings report. Pachter reiterated an Underperform rating and lowered the price target from $11 to $10 at the time.

“Without a hint of any strategy that would reasonably deploy capital, we do not see why shares trade at 2x cash," Pachter said.

The video game retailer announced accelerated store closures, but without more commentary on strategy, Pachter said the company is “no longer beholden to shareholder interests.”

Pachter said the store closures will result in further revenue declines and could also hurt profitability.

“Without any indication that the company plans a turnaround, we remain reluctant to assume that it can and will. Instead, it appears to be moving further away from any shareholder accountability.”

Price Action: GameStop ( GME ) stock is down 0.21% to $29.00 at last check on Monday. Its 52-week trading range is $9.95 to $64.83. GameStop ( GME ) stock is up 77% year-to-date in 2024.

Read Next:

GameStop Ahead Of Q3 Earnings: Will Meme Magic Last Or Metrics Rule?

Image: Shutterstock