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Zacks Investment Ideas feature highlights: GameStop, AMC Entertainment and BlackBerry

·6-min read

For Immediate Release

Chicago, IL – August 16, 2022 – Today, Zacks Investment Ideas feature highlights GameStop GME, AMC Entertainment AMC and BlackBerry BB.

Meme Stock Mania: Still Gas Left in the Tank?

One of the market's most interesting stories over the last several years was the uprising of "meme stocks." Out of the bunch, GameStop was undoubtedly the most popular, shaking the market violently with a short-squeeze that was the magnitude of which is rarely seen.

No matter which side you were on, we can all agree on one thing – it was a wild time. GME shares were trading at around $20 per share at the beginning of January 2021, and after the month was over, shares closed up more than 1500% at around $325 per share.

Needless to say, long-term investors were rewarded handsomely, and it was an absolute paradise for day traders. For short-sellers, it was a nightmare.

Simply put, it was a rollercoaster that many market participants decided to take a ride on.

Along with GameStop, a few others in the meme stock bunch include AMC Entertainment and BlackBerry.

Perhaps going unnoticed by some, these stocks have been hot for some time now. Buyers have stepped up notably, especially for AMC shares. Now that the attention is back, it raises a valid question: how do these companies currently stack up? Let's take a closer look.

GameStop

GameStop currently carries a Zacks Rank #4 (Sell) with an overall VGM Score of an F. Analysts have primarily kept their earnings estimates unchanged, but one has lowered their outlook for the company's current fiscal year (FY23).

Still, the Zacks Consensus EPS Estimate of -$1.50 for FY23 pencils in a 32% year-over-year decline in the bottom-line.

However, the company's top-line is forecasted to register solid growth – GameStop is projected to generate $6.4 billion in revenue throughout FY23, registering a 6.7% year-over-year uptick.

Bottom-line results have left some to be desired as of late, with GameStop recording four consecutive EPS misses and the average surprise being -250% over the timeframe. Top-line results have been notably stronger, with the company posting back-to-back revenue beats.

BlackBerry

BlackBerry sports a Zacks Rank #3 (Hold) with an overall VGM Score of an F. Analysts have dialed back their earnings outlook extensively over the last 60 days across all timeframes.

The company's bottom-line projections allude to some weakness; the Zacks Consensus EPS Estimate of -$0.23 for BB's current fiscal year (FY23) reflects a steep 130% year-over-year decline in earnings.

BlackBerry's top-line is forecasted to take a hit as well – the Zacks Consensus Sales Estimate for FY23 of $690 million represents a modest 3.9% year-over-year decline from FY22 sales of $718 million.

In addition, the company has primarily reported EPS above expectations, exceeding the Zacks Consensus Estimate in seven of its last ten quarters. However, BB recorded a 25% bottom-line miss in just its latest quarter.

AMC Entertainment

AMC Entertainment carries a Zacks Rank #3 (Hold) with an overall VGM Score of a D. Over the last 60 days, analysts have lowered their earnings outlook extensively.

Unlike GME and BB, projections for AMC allude to solid growth within both the top and bottom lines.

For the company's current fiscal year (FY22), the Zacks Consensus EPS Estimate of -$1.38 reflects a 45% year-over-year uptick in earnings.

Pivoting to the top-line, the FY22 revenue projection of $4.3 billion pencils in a notable 71% year-over-year increase.

AMC has found solid consistency within its bottom-line as of late, exceeding the Zacks Consensus EPS Estimate in four of its last five quarters. Just in its latest print, the company posted a solid 11% bottom-line beat.

Top-line results have primarily been mixed, with the company recording just five revenue beats over its last ten quarters.

Bottom Line

It may surprise some to see that meme stocks have been hot for some time now, with buyers coming back in swarms. During the action-packed period, these stocks were the hottest item on the block.

From a trading standpoint, the volatility of these stocks is a dream. However, long-term investors with a much bigger picture in mind likely do not find these riskier stocks nearly as attractive.

Out of the three above, AMC is the only company forecasted to register year-over-year growth within both the top and bottom-lines. Still, shareholders of each company have been rewarded handsomely over the last three months.

The key takeaway is this - market participants need to be highly-aware of the rollercoaster-type action that meme stocks dish out.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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