Gamestop Story

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GME -- USA Stock  

USD 143.07  15.29  9.66%

Gamestop Corp is scheduled to announce its earnings today. The next earnings report is expected on the 8th of June 2021. The current year Interest Coverage is expected to grow to 37.36. The current year Calculated Tax Rate is expected to grow to 32.76. As many baby boomers are still indifferent towards consumer cyclical space, it makes sense to digest Gamestop Corp as a unique choice for millenniums.
Published over two weeks ago
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How much will Gamestop Corp owe in April?
Gamestop Corp has 1.16 B in debt with debt to equity (D/E) ratio of 3.48, meaning that Gamestop Corp heavily relies on borrowing funds for operations. The entity has a current ratio of 1.03, demonstrating that it is not liquid enough and may have problems paying out its financial commitments when the payables are due. Earning per share calculations of Gamestop Corp is based on official Zacks consensus of 4 analysts regarding Gamestop Corp's future annual earnings. Given the historical accuracy of 39.5%, the future earnings per share of the company is estimated to be -2.07 with the lowest and highest values of -2.31 and -1.82, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.
Gamestop Corp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Gamestop Corp, including all of Gamestop Corp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Gamestop Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall Gamestop Corp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Gamestop Total Liabilities

Gamestop Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Gamestop Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Gamestop Corp balance sheet include debt obligations and money owed to different Gamestop Corp vendors, workers, and loan providers. Below is the chart of Gamestop short long-term liabilities accounts currently reported on its balance sheet.
You can use Gamestop Corp financial leverage analysis tool to get a better grip on understanding its financial position

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.

Breaking it down

The latest price surge of Gamestop Corp may raise some interest from shareholders. The stock closed today at a share price of 187.65 on 3,578,191 in trading volume. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in April. The stock standard deviation of daily returns for 30 days investing horizon is currently 31.44. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Gamestop Corp partners.

Liabilities Breakdown

1.9 B
Current Liabilities
583.9 M
Long-Term Liabilities
Total Liabilities2.44 Billion
Current Liabilities1.85 Billion
Long-Term Liabilities583.95 Million
Tax Liabilities100.95 Million

Are Gamestop Corp technical indicators showing a turnaround?

The mean deviation is down to 18.51 as of today. Gamestop Corp is showing large volatility of returns over the selected time horizon. We encourage all investors to investigate this asset further to make sure related market timing strategies are aligned with all the expectations about Gamestop Corp implied risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Gamestop Corp's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Gamestop Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Conclusion on Gamestop Corp

Although other entities under the specialty retail industry are still a bit expensive, Gamestop Corp may offer a potential longer-term growth to shareholders. On the whole, as of the 23rd of March 2021, our analysis shows that Gamestop Corp moves completely opposite to the market. The firm is overvalued and projects low probability of financial unrest for the next 2 years. Our actual 30 days buy-hold-sell recommendation on the firm is Strong Sell.

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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