How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in GameStop (GME) ten years ago? It may not have been easy to hold on to GME for all that time, but if you did, how much would your investment be worth today?
GameStop's Business In-Depth
With that in mind, let's take a look at GameStop's main business drivers.
Headquartered in Grapevine, TX, GameStop Corp. is the world's largest video game retailer. The company offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles, in both physical and digital formats. Through all its channels, the company sells various types of digital products, including downloadable content, network points cards, prepaid digital, prepaid subscription cards and digitally downloadable software as well as collectible products. The company also publishes Game Informer, the world’s largest print and digital video game publication featuring reviews of new title releases, game tips and news regarding current developments in the video game industry. It also operates PowerUp Rewards program. The company operates business in four geographic segments: United States, Canada, Australia and Europe.
As of Feb. 2024, GameStop operates approximately 4,169 retail outlets globally with around 2,915 of these located in the United States.
The company’s products are categorized as follows:
Hardware and Accessories (48.5% of Third-Quarter Fiscal 2024 Sales): GameStop offers new and pre-owned video game platforms from the major console and PC manufacturers. The current generation of consoles include the Sony PlayStation 4 (2013), Microsoft Xbox One (2013) and the Nintendo Switch (2017). Accessories consist primarily of controllers, gaming headsets, virtual reality products and memory cards.
Software (31.6% of Sales): The company provides new and pre-owned video game software for current and certain prior generation consoles. It also sells a wide variety of in-game digital currency and digital downloadable content.
Collectibles (19.9% of Sales): The category consists of licensed merchandise, primarily related to the video game, television and movie industries and pop-culture themes, which are sold through the company’s video game store and e-commerce properties, and ThinkGeek and Zing Pop Culture stores.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For GameStop, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in December 2014 would be worth $3,457.39, or a gain of 245.74%, as of December 23, 2024, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 186.42% and the price of gold went up 114.74% over the same time frame.
Analysts are forecasting more upside for GME too.
GameStop has outpaced the industry in the past three months. The company has been progressing well with its growth endeavors while maintaining a solid balance sheet. The company has been taking initiatives to diversify its business and become a more technology-driven firm. GameStop has also been pursuing opportunities in cryptocurrency, non-fungible tokens and Web 3.0 gaming verticals. GameStop improved its debt position by reducing its net long-term debt to $9.6 million at the end of the third quarter from $20 million in the last year period. The company's strong liquidity position of $4.6 billion enhances its resilience against market volatility and operational challenges. However, the decline in collectibles and physical gaming product sales reflects a shift toward digital formats, signaling changing consumer preferences.
The stock is up 6.88% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2025. The consensus estimate has moved up as well.Zacks Naming Top 10 Stocks for 2025
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GameStop Corp. (GME) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
