Gamestop

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Gamestop

• Company Analysis

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What is GameStop?

• Specialty retail chain specializing in video
  games and video game accessories
• Sub-Industry GICS Computer Electronics
  Retail (Sector)
• Operate primarily through small stores
• Sells not only new video games and systems, but
  used games, game magazines, PC games, and video
  game accessories.

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Industry

• In 2007, S P Computer Retail Index jumped
  14.9, as opposed to a 3.6 jump in S P 1500
  Index (Sector).
• New games have little price differentiation
  regardless of retail store. Consumer emphasis on
  convenience and service

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Socio-Economic factors

• Video game industry in a boon. In 2007, retail
  sales rose to 17.94 billion (Nintendo).
• Video game industry has proven relatively
  recession proof, as sales rose in December, even
  as other discretionary sales in economy fell
  (Nintendo).
• Video games have become much more mainstream
  Halo and Guitar Hero college parties
• With the rise of the Nintendo Wii and DS, new
  demographics are being tapped (Nintendo)

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GameStop financials

• Video and PC game players in various countries.
  As of Feb 3, 2007, GameStop operates 4,778 stores
  in the U.S., Australia, Canada and Europe
  (Business)
• Strongest market- United States. 80 of stores
  are located within the states (Business)

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GameStop financials (financials)

• 2004 Revenue .3217 Billion
• 2007 Revenue 5.319 Billion
• 2004 Earning per Share (EPS) .53/share
• 2007 EPS 1.00/share
• Projected 2008 EPS 1.78/share
• Projected 2009 EPS 2.26/share
• 2004 Cash flow 92.4 Million
• 2007 Cash flow 268 Million
• Citi Upgrades Gamestop (GME) from Hold to Buy
  (Citi). Price target rise from 57 to 65

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Hist. Profit Chart (GameStop)
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Profit Margin chart (GameStop)
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GameStop The Stock (Basic)
Stock price as of 14 Feb close 45.76
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GameStop GME vs. S P (Basic)
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Competitors

• Best Buy
• Radio Shack
• Circuit City
• Wal Mart
• GameTap and other online game retailers

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Future outlook

• GameStop has matured US market, strong profits
  and great cash flows
• Has little to no international market- furiously
  building this (Ivan).
• Has recently become a hot stock speculation
  may inflate price
• Video game industry on upward trend GameStop
  will profit from this
• GameStops growth depends on its ability to
  penetrate international markets

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Works Cited

• Basic Chart. GameStop Corp. (GME). Yahoo!
  Finance. 14 Feb. 2008. http//finance.yahoo.com/
  q/bc?t2ysGMElonzmqlcc5EGSPC
• Citi Upgrades Gamestop (GME) to Buy. 4 Feb 2008.
  14 Feb 2008. http//www.streetinsider.com/Upgrad
  es/CitiUpgradesGamestop(GME)toBuy/3316075.htm
  l
• Competitors (All). GameStop Corp A Company
  Profile. 2008. Standard Poors. 3 Feb. 2008.
  http//www.netadvantage.standardandpoors.com/NASA
  pp/NetAdvantage/cp/companyAllCompetitors.do
• Financials. GameStop Corp A Company Profile.
  2008. Standard Poors. 14 Feb. 2008.
  http//www.netadvantage.standardandpoors.com/NASAp
  p/NetAdvantage/cp/companyFinancials.do
• Ivan, Tom. GameStop Increases European Presence.
  6 Feb. 2008. 14 Feb. 2008. http//www.next-gen
  .biz/index.php?optioncom_contenttaskviewid898
  8Itemid2
• Nintendo Tops Video Game Sales in 2007.
  Portfolio.com. 18 Jan. 2008. 4 Feb. 2008.
  http//www.portfolio.com/news-markets/national-new
  s/ap/2008/01/18/nintendo-tops-video-game-sales-in-
  2007
• Sector Scorecard GICS Sub-Industry Summary.
  GameStop Corp A Company Profile. 2008.
  Standard Poors. 3 Feb. 2008.
  http//www.netadvantage.standardandpoors.com/NASAp
  p/NetAdvantage/cp/companyIndustryPage.do
• Wallace, Witkowski. SP raises GameStop outlook
  to positive from stable. MarketWatch. 8 Feb.
  2008. 14 Feb. 2008. http//www.marketwatch.com/N
  ews/Story/Story.aspx?guid7bB26AB697-C834-490E-82
  3C-6200651C102C7dsiteidyhoodistyhoo