NEW YORK (TheStreet) -- Shares of GameStop (GME) - Get GameStop Corp. Class A Report were increasing in mid-afternoon trading on Tuesday as the Grapevine, TX-based video game, electronics and wireless retailer is slated to report its 2016 second-quarter results following Thursday's closing bell.
Wall Street is looking for GameStop to post adjusted earnings of 27 cents per share and $1.72 billion in revenue.
The retailer reported adjusted earnings of 31 cents per share on revenue of $1.76 billion during the 2015 second quarter.
Analysts have speculated that digital downloads pose a risk to brick-and-mortar gaming stores, but Piper Jaffray said in an analyst note yesterday that in a survey of 100 consumers, 62% plan to buy a new console in the next year. This data should bode well for retailers like GameStop, the firm said, according to TheFly.
In its 2016 first quarter, GameStop said it saw a 28.8% decline in its video game segment as a result of a slump in new hardware sales. However, the company noted that its non-physical gaming business, which includes a digital segment, continues to improve significantly.
GameStop anticipates that same-store sales will fall between 4% and 7% in the second quarter.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GAMESTOP CORP as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: GME