Gamestop Story

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GME -- USA Stock  

USD 101.74  6.99  6.43%

It looks as if GameStop will continue to recover much faster as its share price surged up 31.54% today. GameStop current daily volatility is 10.47 percent, with a beta of -0.63 and an alpha of 2.34 over DOW. While some millenniums are indifferent towards retail, it makes sense to digest GameStop. We will analyze why GameStop investors may still consider a stake in the business.
Published over a month ago
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Is GameStop (NYSE:GME) a new disruptor?
GameStop has roughly 445.9 M in cash with 199.2 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.39. GameStop holds a performance score of 16 on a scale of zero to a hundred. The company retains a Market Volatility (i.e. Beta) of -0.6279, which attests to possible diversification benefits within a given portfolio. Let's try to break down what GameStop's beta means in this case. As returns on the market increase, returns on owning GameStop are expected to decrease at a much lower rate. During the bear market, GameStop is likely to outperform the market. Although it is essential to pay attention to GameStop current price history, it is also good to be reasonable about what you can do with equity current price movements. Our philosophy towards determining future potential of any stock is to look not only at its past charts but also at the business as a whole, including all available fundamental and technical indicators. To evaluate if GameStop expected return of 2.47 will be sustainable into the future, we have found twenty-seven different technical indicators, which can help you to check if the expected returns are sustainable. Use GameStop downside variance, daily balance of power, and the relationship between the maximum drawdown and skewness to analyze future returns on GameStop.
Investing in Gamestop Corp, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Gamestop Corp along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Gamestop Corp's stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Gamestop Corp in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Gamestop Corp. Your research has to be compared to or analyzed against Gamestop Corp's peers to derive any actionable benefits. When done correctly, Gamestop Corp's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Gamestop Corp.

How important is Gamestop Corp's Liquidity

Gamestop Corp financial leverage refers to using borrowed capital as a funding source to finance Gamestop Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Gamestop Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Gamestop Corp's total debt and its cash.

How Gamestop utilizes its cash?

To perform a cash flow analysis of Gamestop Corp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Gamestop Corp is receiving and how much cash it distributes out in a given period. The Gamestop Corp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Gamestop Corp Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 480.5 Million

Gamestop Corp Correlation with Peers

Investors in Gamestop can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Gamestop Corp. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Gamestop Corp and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Gamestop is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of Gamestop for more details

Another Deeper Perspective

GameStop is unstable given 1 month investment horizon. GameStop holds Efficiency (Sharpe) Ratio of 0.24, which attests that the entity had 0.24% of return per unit of risk over the last month. Our standpoint towards determining the volatility of a stock is to use GameStop market data together with company specific technical indicators. We are able to interpolate and collect twenty-seven different technical indicators, which can help you to evaluate if expected returns of 2.47% are justified by taking the suggested risk. Use GameStop Downside Deviation of 6.26, risk adjusted performance of 0.2217, and Market Risk Adjusted Performance of (3.53) to evaluate company specific risk that cannot be diversified away.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Can GameStop build up on the latest surge?

Variance is down to 103.94. It may indicate a possible volatility dip. GameStop is displaying above-average volatility over the selected time horizon. Investors should scrutinize GameStop independently to ensure intended market timing strategies are aligned with expectations about GameStop volatility.

Our Final Take On GameStop

Although other entities within the specialty retail industry are still a little expensive, even after the recent corrections, GameStop may offer a potential longer-term growth to shareholders. All things considered, as of the 22nd of January 2021, our current 30 days buy vs. sell advice on the firm is Strong Sell. We believe GameStop is overvalued with below average odds of financial turmoil for the next two years.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Gamestop Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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