GME - Embedded Expectations Analysis - 2018 08 13
GameStop Corp. (GME:USA) currently trades at historical lows relative to UAFRS-based (Uniform) Assets, with a 1.1x Uniform P/B, implying bearish expectations for the firm. Moreover, management has concerns about comparable sales, rising costs, and overall demandSpecifically, management may have concerns about continuing declines in comparable store sales, as well as rising costs related to store closings. Moreover, they may lack confidence in the sustainability of strong margins in their collectibles segment, and sales growth in their accessories segment, which has been driven by headphone and controller demand for Fortnite and PUBG. Additionally, they may lack confidence in their ability to manage Switch inventory, as they may anticipate demand for the console to fall. Also, management may be concerned about decreasing operating earnings and foreign currency headwinds, as well as their ability to maintain a robust balance sheet while remaining shareholder friendly
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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