By How Big will GameStop’s GME Future Sales be?
GameStop Corp, formerly known as GSC Holdings Corp, is an American video game retailer that engages in the retail of multichannel video games, consumer electronics, entertainment products and wireless services through its e-commerce properties and stores.
(NYSE: GME)
The company engages in the sales of both old and new video game platforms, monitors, accessories, like visual reality products, controllers, memory cards, and other gaming accessories and consumer electronics, in both physical and digital formats.
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GME, through its buy and sell trade program, enables gamers to be able to trade in video game consoles and accessories, as well as consumer electronics for cash or in-store credit.
GAMESTOP operates in various countries; which includes, United States, Canada, Australia and Europe. The company is headquartered in Grapevine, Texas, and is the largest video game retailer worldwide.
GameStop had struggled in recent years due to competition from digital distribution services, as well as the economic effects of the COVID-19 pandemic, which reduced the number of customers who shopped traditionally.
As a result, GameStop’s stock price declined, leading many institutional investors to short sell the stock.
Short-selling is a monetary practice whereby an investor (known as a short seller), borrows shares and sells them immediately, hoping to buy them back later at a lower price, then return the borrowed shares with interest to the lender, hence, profiting off the difference.
Short-sellers;
are exposed to a risk of short squeezing, which happens when the shorted stock jumps in value due.
During the COVID-19 pandemic, GameStop was all over the news. The company refused to abide with the state laws (to lockdown), claiming it was ‘essential retail’ to remain open amid COVID-19 shutdowns.
GameStop instructed its retail employees to keep stores open, irrespective of the fact that local authorities kept looking for ways to shut them down over the covid-related lockdown.
GameStop said;
they were “instituting multiple social distancing practices” in their stores by;
- allowing 10 people in at a time;
- reducing its store hours;
- rolling out door deliveries policy so customers can pick up orders outside the retail location;
- suspending trade-ins for the time being;
- postponing all events and midnight launches; and;
- disabling all in-store game stations. Instead of instructing its retail employees to stay home.
GameStop also said they were “providing all their stores with the necessary supply of disinfectant materials and hand sanitizer” and only allowing employees to remain home “if they are sick or experiencing any flu-like symptoms.”
The public were not fully delighted in the actions taken by GameStop during the pandemic. Hence, it resulted in a slight drop in the stock price and revenue of the company. 2020 was recorded as a bad business year by most firms, GameStop not so much.
Here is a data for GameShop historical annual stock price:
| Year | Average Stock Price | Year Open | Year High | Year Low | Year Close | Annual % Change |
| 2021 | 169.7067 | 17.2500 | 347.5100 | 17.2500 | 148.3900 | 687.63% |
| 2020 | 7.1415 | 6.3100 | 20.9900 | 2.8000 | 18.8400 | 209.87% |
| 2019 | 7.5486 | 13.0700 | 15.9800 | 3.2100 | 6.0800 | -51.82% |
| 2018 | 14.8176 | 18.2600 | 19.9600 | 11.6700 | 12.6200 | -29.69% |
| 2017 | 21.5751 | 25.3700 | 26.5200 | 16.0000 | 17.9500 | -28.94% |
| 2016 | 27.9685 | 28.3100 | 33.3800 | 20.7300 | 25.2600 | -9.91% |
| 2015 | 40.4774 | 33.8000 | 47.4400 | 28.0400 | 28.0400 | -17.04% |
| 2014 | 39.7135 | 49.6500 | 49.6500 | 31.9200 | 33.8000 | -31.38% |
| 2013 | 40.0463 | 25.6600 | 57.5900 | 22.6100 | 49.2600 | 96.33% |
| 2012 | 21.8116 | 23.7900 | 27.8300 | 15.7300 | 25.0900 | 3.98% |
| 2011 | 23.5468 | 22.9100 | 28.2100 | 19.5000 | 24.1300 | 5.46% |
| 2010 | 20.5435 | 22.9000 | 25.4600 | 17.2000 | 22.8800 | 4.28% |
| 2009 | 25.0349 | 23.1900 | 32.4200 | 20.4400 | 21.9400 | 1.29% |
| 2008 | 41.8292 | 60.3000 | 60.3000 | 17.5000 | 21.6600 | -65.13% |
| 2007 | 41.6911 | 27.4500 | 63.3000 | 25.5650 | 62.1100 | 125.40% |
| 2006 | 22.6180 | 16.1550 | 28.8950 | 16.1550 | 27.5550 | 73.19% |
| 2005 | 14.4489 | 10.7650 | 18.9000 | 9.3000 | 15.9100 | 42.31% |
| 2004 | 8.8969 | 7.5650 | 11.7500 | 7.2700 | 11.1800 | 45.10% |
| 2003 | 6.7838 | 4.8600 | 9.4600 | 3.7950 | 7.7050 | 57.24% |
| 2002 | 9.5629 | 10.0500 | 12.1050 | 4.5750 | 4.9000 | 0.00% |
2004 to 2016 were known as GameStop’s successful years, solely to the fact that they acquired lots of video games during those years, which expanded the company’s operations in all their stores.
GME acquired;
- EB games (formerly Electronic Boutique);
- Rhino video games from Blockbuster LLC;
- Free Records Shop, Micromania (a French video game retailer which resulted in the establishment of various stores in France);
- Jolt Online gaming, Kongregate;
- Spawn labs, BuyMyTronics;
- Simply Mac and Spring Mobile.
GameStop’s digital revenue kept increasing immensely, the company had lots of investors and shareholders
After the pandemic, the company seemed to be gaining lots of shareholders as they seem to be getting back on track.
Throughout the year 2021, GameStop’s revenue was said to have increased more than 70% from the revenue they had recorded in the year before.
On the 24th of January, GameStop Corporation stock fell $6.21, accounting for a 5.84% decrease. GameStop opened at $101.00 before trading between $102.86 and $86.29 throughout Monday’s session.
The activity saw GameStop’s market cap fall to $7,646,530,717 on 6,267,749 shares above their 30-day average of 3,323,085.
Analysts expect GameStop Corp. (NYSE:GME) to report sales of $2.19 billion for the current quarter.
Two analysts have provided estimates for GameStop’s earnings. The highest sales estimate is $2.23 billion and the lowest is $2.15 billion.
GameStop posted sales of $2.12 billion in the same quarter last year, which suggests a positive year-over-year growth rate of 3.3%.
The business is expected to issue its next quarterly earnings report on Tuesday, March 22nd.
Analysts expect that GameStop will;
report full-year sales of $5.95 billion for the current fiscal year, with estimates ranging from $5.91 billion to $5.99 billion.
For the next year, analysts anticipate that the firm will post sales of $6.10 billion, with estimates ranging from $5.92 billion to $6.28 billion.
Zacks Investment Research’s sales calculations are an average based on a survey of sell-side research firms that provide coverage for GameStop.
GameStop last released its earnings results on Wednesday, December 8th. The company reported ($1.39) earnings per share for the quarter, missing the Zacks’ consensus estimate of ($0.52) by ($0.87).
The firm had revenue of $1.30 billion for the quarter, compared to analysts’ expectations of $1.19 billion. GameStop had a negative return on equity of 8.05% and a negative net margin of 2.61%.
The firm’s quarterly revenue was up 29.1% on a year-over-year basis. During the same quarter in the previous year, the company posted ($0.53) earnings per share.
The latest closing stock price for GameStop as of February 01, 2022 is 112.60.
So if you’re wondering on whether or not GameStop stock is safe to buy;
best advice will definitely be ‘Yes’ in my opinion.
You should do your own research before buying or selling or seek to obtain professional finance investment advice.
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