i’m not sure how up to date you are on the whole GameStop situation but Amazon is heading for bankruptcy and GameStop is now their biggest competitor. market cap isn’t there yet, but the company plan is on track. also Jeff Bezos is the target of every major corporation now. Amazon CANT survive the next few years with their increasing bad reputation from littering and burning unused inventory to labor rights with their workers being violated. Amazon sounds great, until you look underneath the hood and see all the parts are grinding and screaming. GameStop is targeting Amazon to be the epicenter of e-commerce/gaming. this GameStop earnings has been MASSIVELY anticipated and i believe Amazon will continue to develop a negative correlation to GameStop. so what do they have to do with each other? competitors and GameStops about to make the move with a bite to the jugular.
Just a heads up - I don't think the significant price action will occur until earnings. So you have time. Downside risk should be relatively low since P/E is in the gutter, but theta might eat into your calls a bit while we wait.
There's a chance that we could see a small run-up into earnings if institutions get some early CC data that supports a potential rev beat or if they get some data on the impressions / estimated conversions from the campaign. I pulled this just from using the apps - I'm sure some funds somewhere covering the stock can come to a similar conclusion before their earnings. $AEO has a small run up before their massive 40% post earnings move
Yea, I think this is more of a medium-term trade to play off current market sentiment being low & the catalyst of their mega-viral ad campaign causing a beat / rosier outlook than Wall Street's currently expecting.
The low valuation (TTM P/E, Forward P/E), high short interest, and poor sentiment make it an attractive play where Wall St is potentially overlooking a cultural phenomenon that'll drive up sales of a brand unexpectedly.
Fashion's too tricky to hold for a long - but low expectations with an EPS/Rev beats + improved outlook make for a great potential price move post earnings (hence the $AEO comparison)
I think they'll move similarly like $AEO once earnings comes up, with a potential run-up beforehand with institutions that potentially have access to credit card data. They have a viral ad campaign that is possibly more effective than what $AEO did with their Sydney Sweeney campaign and they're current trading at <10 P/E with low expectations
While you may be partially correct, this isn’t happening to them in 2020 right after their big blow up. Lulu’s brand has had a lot of time to become entrenched and their product offerings have succeeded beyond leggings lol.
I think the growth they are seeing in men’s underwear will rival their leggings business in the coming years. Their business isnt half as niche as you think it is, and their P/E is at the level of an airline right now.
Comparatively, it’s such low risk bet that it’s almost a no brainer