- "I'm much more of a believer than I was yesterday, but I also think you're taking your life in your hands if you buy the stock up here," CNBC's Jim Cramer said reacting to GameStop's earnings report.
- "Let it sink to the mid-double digits, then I'll get back to you," the "Mad Money" host said.
- "As long as it's in the triple digits, it's trading like the turnaround has already happened," he said.
CNBC's Jim Cramer on Wednesday said there's promise in GameStop's turnaround story, though he thinks the company remains overvalued after its most recent quarterly report.
"I'm much more of a believer than I was yesterday, but I also think you're taking your life in your hands 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 game retailer tumbled 34% on Wednesday, one day after the company posted quarterly results that missed analyst estimates 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 decline of 3%. Analysts were expecting $1.35 and $2.2 billion, according to FactSet. Revenue was down 21% for the full fiscal year, which ended Jan. 30, as the company suffered losses amid Covid-19 business disruptions.
Cramer said the results were "about as good as anyone could've reasonably expected," though he said the stock could have rallied on the report had it been trading at $30 or less apiece, a fraction of its triple-digit share price.
Cramer also faulted management for not providing guidance or offering details about GameStop's transformation plan. The company has been reducing its store count 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 like the turnaround has already happened," he said. "If you buy the stock here, you're betting that Ryan Cohen's plan will be wildly successful, which seems like a stretch given that we don't even know what the plan is yet."
GameStop's report was the first since Reddit traders engineered a January short squeeze in the stock. GameStop shares skyrocketed nearly 2,000% within a week.
The stock closed Wednesday at $120.30, down 75% from its peak during the head-turning Reddit rally.
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