GME - Embedded Expectations Analysis - 2020 06 24
GameStop Corp. (GME:USA) currently trades at historical lows relative to UAFRS-based (Uniform) assets, with a 0.7x Uniform P/B. At these levels, the market has expectations for profitability to remain muted, and management may be concerned about their transformational goals, sales declines, and cost structureSpecifically, management may lack confidence in their ability to prudently manage debt, capitalize on their leading global market position and strong loyalty base, and fulfill demand through their Delivery at the Door program. In addition, they may be exaggerating their store and online traffic improvement, their ability to address underperforming areas of the business, and the progress of their transformational goals, particularly transforming vendor relationships for the future of gaming. Furthermore, management may have concerns about lower collectibles, hardware, and accessory sales in anticipation of the new console launches and the likelihood of a challenging sales environment. Moreover, they may be downplaying concerns about their inventory levels and they may lack confidence in their ability to continue to improve the cost structure of their business
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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