Cramer says GameStop remains overvalued, despite promising Q4 report

CNBC’s Jim Cramer on Wednesday said there may perchance be promise in GameStop‘s turnaround memoir, though he thinks the corporate stays hyped up after its most common quarterly document.

“I’m principal extra of a believer than I was the day past, however I furthermore maintain you may perchance be taking your existence for your hands whenever you preserve the inventory up right here,” the “Inflamed Cash” host said. “Let it sink to the mid-double digits, then I will catch abet to you.”

Shares of the embattled online game retailer tumbled 34% on Wednesday, at some point after the corporate posted quarterly results that overlooked analyst estimates on the close and bottom traces.

The company reported earnings per share of $1.34 for the quarter and revenue of $2.1 billion, a Twelve months-over-Twelve months decline of 3%. Analysts had been waiting for $1.35 and $2.2 billion, per FactSet. Revenue was down 21% for the total fiscal Twelve months, which ended Jan. 30, because the corporate suffered losses amid Covid-19 industry disruptions.

Cramer said the results had been “about as factual as any individual may perchance’ve reasonably anticipated,” though he said the inventory will possess rallied on the document had it been procuring and selling at $30 or less apiece, a section of its triple-digit share mark.

Cramer furthermore faulted management for no longer offering steering or offering major aspects about GameStop’s transformation opinion. The company has been reducing its retailer count and is anticipated to be engaged on a opinion to select out its digital operations and compete within the score age.

“As prolonged as it be within the triple digits, it be procuring and selling just like the turnaround has already took recount,” he said. “Whenever you happen to preserve the inventory right here, you may perchance be making a wager that Ryan Cohen’s opinion will be wildly successful, which sounds like a stretch given that we construct no longer even know what the opinion is yet.”

GameStop’s document was the first since Reddit traders engineered a January short squeeze within the inventory. GameStop shares skyrocketed nearly 2,000% within every week.

The inventory closed Wednesday at $120.30, down 75% from its high throughout the high-turning Reddit rally.