GME - Embedded Expectations Analysis - 2019 11 15
GameStop Corp. (GME:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.4x Uniform P/E, implying bearish expectations for the firm. Moreover, management may be concerned about their debt, digital sales, and divestitures.Specifically, management may lack confidence in their ability to improve ROA through their new cloud platform and to grow their collectibles business. Furthermore, they may lack confidence in their ability to streamline their digital sales process, and they may be exaggerating the impact their ThinkGeek divestiture had on gross margin. Finally, they may lack confidence in their ability to continue driving down their debt.
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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