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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Gamestop Corp. (XNYS:GME) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
GME
Name:
GAMESTOP CORP. (XNYS:GME)
Sector:
- 33500.00K
Industry:
Specialty Retail
CEO:
Mr. George Sherman
Total Employees:
12,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -265.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF GAMESTOP CORP.(GME) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
27.36
One Month Price Target:
$27.27
Six Month Price Target :
$26.82
Likely Price in One Year's Time:
Ticker:
$26.28
Likely Trading Range Today Under (Normal Volatility)
$27.09
Price Upper limit ($) :
$28.18
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$21.03
This week:
$13.2
This month :
-$.96
Other Primary facts
Market Cap:
7.65B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
304.52M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
134.84%
-60.%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$56.67
$42.72
-$1.95
$12.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$38.18
Buy Put:
Sell Put:
$35.20
$16.50
$19.52
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
GME
Sharpe Ratio:
8.52%
Comparison:
GME, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 197.94% higher than the industry
& ratio is 273.88% higher than the market/S&P 500 average
Average Returns/Yield of
GME
Daily returns:
1.01%
Weekly returns:
5.06%
Monthly returns:
20.23%
Yearly returns:
34.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is 595.05% above industry average
Classification:
GME, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.02
Statistical test of Returns:
GME has yielded a higher return than the market, the results are statistically significant
Volatility (measured by Standard Deviation)
Daily Volatility:
11.76%
Weekly Volatility:
26.30%
Monthly Volatility:
52.61%
Yearly Volatility:
182.24%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.85%
Volatility in last five trading days has been -84.23% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-23.15%
Weekly VaR:
-51.76%
Monthly VaR:
-103.52%
How Much Can the price of
GME
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-80%
Worst case (decline):
>85%
This translates to price declining to:
$5.50
This translates to price declining to:
$4.10
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
GME is a 630.67% riskier investment compared to the market/S&P 500 & is 525.96% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 183.22% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
GME
Beta in relation to market/S&P 500---0.59
Expected beta in 1 year's time:
0.369
Expected beta in 3 year's time:
0.523
Unlevered (debt free) Beta:
-0.392
Beta in relation to Nasdaq (XNAS):
1.007
Beta in relation to all global stocks::
0.795
Beta Comparison & Analysis
Beta of competitors/peers::
1.54
Beta is -138.04% lower than peers
Average Industry Beta:
1.43
Beta is -140.97% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
2.436
Alpha is 1008.32% above industry average alpha yield
Alpha is 15506% higher than market/& is unsustainably high
Analysis of Cost of Capital of
GME
Equity cost of capital:
-0.009
Equity cost of capital is -106.67% below industry mean WACC
Unlevered (without debt) cost of capital:
-0.58%
Before-tax cost of debt:
0.39%
After-tax cost of debt:
0.31%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.31%
WACC is -107.44% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.07
Revenue growth rate per share of (3Y):
9.47
Annual revenue growth rate is -124.06% below industry average
EPS:
-$6.26
Expected Annual growth rate of EPS (3Y):
-7.30%
Expected future EPS growth rate is -120.72% lower than the Specialty Retail industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -99.70%
Equity growth rate per share is -294.40% lower than the industry
Debt per share
$1.46
EBITDA per share
-$1.33
Valuation Analysis Today of
GME
P/E Ratio:
0
P/E Ratio of Competitors/Peers:
20.28
P/E ratio is -100.00% lower than main peers & is higher than the industry
-
GME is -120.32% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.36
Price to sales ratio is -66.49% below the industry mean
P/B (Price to book value ratio):
9.47
-
-
Net income growth rate (3Y):
-1067.92%
Net income growth rate is 125.63% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
50.60%
Net debt to equity ratio:
2.02%
Debt to assets ratio:
17.36%
Net debt to assets ratio:
0.69%
Debt-to-asset ratio is -76.00% below industry average
Ability to repay debt:
Interest coverage ratio:
-144.96
Interest coverage ratio is -685.33% less than industry average
Looking forward:
Debt growth rate:
-11.92%
Annual debt growth is -117% lower than industry average debt growth rate
Debt repayment rate in last quarter: 42.76%
Analysis of Key Statistics
Correlation of price movement with the market:
0.135
Statistical significance of correlation:
GME has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.475
Stock price is -71.61% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.475
Correlation of price movement with Nasdaq (^IXIC):
-0.013
Covariance of price movement with the market:
-0.09
Kurtosis
41.969
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
4.323
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
GME
Gross Profit Margin Ratio:
90%
Operating Profit Margin Ratio:
-7.88%
Operating profit margin is -221.15% lower than the industry
Net Profit Margin Ratio:
90%
Effective Tax Rate:
2.46%
Effective tax rate is -89.11% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-53.71%
Return on equity (ROE) is -3875.80% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-18.43%
Return on assets (ROA) is -298.12% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
1.36
Current ratio is -27.92% below industry average
Cash Conversion Cycle (days):
-30
Cash conversion cycle is -146.41% below industry average
The remaining useful life of property plant & equipment is: 5.7 years
Stock based compensation to net income ratio:
-1.21%
In-depth Efficiency Analysis
Revenue generated per employee:
509.4K
Each employee generates -31% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 33.8K
Each employee generates -114% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 39.4K
Each employee generates -127% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.8K
Each employee generates -107% less free cash flow than industry average revenue per employee
Assets/Capital per employee
75.5K
Each employee generates -107% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
GME
HYATT HOTELS CORPORATION (XNYS:H)
TAPESTRY, INC. (XNYS:TPR)
RH (XNYS:RH)
SERVICE CORPORATION INTERNATIONAL (XNYS:SCI)
WILLIAMS-SONOMA, INC. (XNYS:WSM)
LEAR CORPORATION (XNYS:LEA)
On Holding Ltd (XNYS:ONON)
Berry Global Group, Inc. (XNYS:BERY)
BORGWARNER INC. (XNYS:BWA)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�29%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
6.11B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.80B
1.32B
-
-
1.79B
-
-
1.79B
100.00K
2.80M
75.60M
- 405900.00K
- 481400.00K
- 472400.00K
- 484300.00K
- 11900.00K
- 472400.00K
Statement of Cash Flow
Date:
Period:
18.70M
Differed Income Tax :
-
Stock Based Compensation :
5.70M
Change in Working Capital :
4.90M
Accounts Receivables:
-
Other Working Capital:
- 16200.00K
Other Non-Cash Items:
18.70M
Net Cash Provided by Operating Activities:
- 18800.00K
Investments in PP&E:
- 14700.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
5/1/21
2022
Q1
694.70M
-
694.70M
102.10M
570.90M
289.50M
1.66B
846.80M
-
-
-
-
58.70M
905.50M
-
2.56B
388.60M
267.50M
-
-
561.80M
1.22B
445.00M
20.30M
465.30M
-
1.68B
100.00K
408.10M
- 47200.0K
518.50M
May 1, 2021 at 6:00:00 AM
6.59B
879.50M
2.56B
-
712.50M
17.8M
-
-
- 14700.00K
- 332400.00K
551.70M
-
-
- 50000.00K
169.30M
-
135.80M
770.80M
635.00M
- 18800.00K
- 14700.00K
- 33500.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
GME
2023
2024
2025
2026
2027
$26.36
$25.32
$24.33
$23.37
$22.45