GameStop: Trying To Grasp The Value, But Price Still Doubly Inflated

Nov. 18, 2024 6:05 PM ETGameStop Corp. (GME) Stock1 Comment
Florian Muller profile picture
Florian Muller
352 Followers
(9min)

Summary

  • GameStop's May stock surge was yet again driven by frenzy, but the company's topline remains weak, with accelerating revenue declines.
  • Management capitalized on inflated stock prices, boosting cash reserves, which now constitute a major part of its valuation, yet the issuance diluted shareholders.
  • The collectibles segment and profitability improvements show potential.
  • Despite optimistic valuation adjustments, GameStop's per share value still lies significantly below market price, making it a speculative play rather than a sound investment.

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Comical Timing Of Recent Coverage

The timing of my first GameStop Corp. (NYSE:GME) coverage in April 2024 could not have been more comical. Because already in the week following the publication, the fundamentally baseless craziness

This article was written by

Florian Muller profile picture
352 Followers
"Business valuation is an art, not a science," claim some. However, in my Bachelor's and Master's studies, I have successfully engaged in the scientific examination of valuation and capital investment. Thanks to a cumulative four-year experience in Consulting and Auditing firms including a professional Valuation position, Controlling positions and Freelance Analyst work, I extract tangible value from piles of numbers. However, results become truly rounded when storytelling is added through personal passion. Because business valuation requires both the art of storytelling and scientific methods.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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