GME - Embedded Expectations Analysis - 2018 05 18
GameStop (GME:USA) currently trades near historical lows relative to UAFRS-based (Uniform) Earnings, with a 10.5x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their customers, margins, and revenuesSpecifically, management may lack confidence in their ability to increase trades and reservations through more compelling trade-in promotions around new releases, and may also lack confidence in their ability to expand their range of merchandise to reach new customer demographics. Furthermore, they may be concerned about the sustainability of strong growth in video game licenses, and may have concerns about declining hardware and software margins as a result of the mix of vendors and cooperative marketing funding. Finally, they may have concerns about their declining revenue guidance, and may lack confidence in their expectation for operating earnings to improve for their Tech Brands segment
GameStop is a multichannel video game and licensed consumer products retailer. The company's products and services includes: New Video Game Hardware, which provides video game platforms from manufacturers; New Video Game Software, which provides new video game software for existing and certain prior generation consoles from manufacturers, including Sony, Nintendo and Microsoft; Video Game Accessories, which consist primarily of controllers, gaming headsets, virtual reality products, and memory cards; and Digital, which sells a variety of digital currency and has developed technology to sell downloadable content and full-game downloads in its stores and on its U.S. website.
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