Gamers’ mecca GameStop
What analysts say:
- Buy, sell, or waffle? Fifteen analysts still play GameStop, down one from last quarter. They give the stock 11 buy ratings and four holds.
- Revenue. On average, analysts expect to see sales rise 26% to $1.69 billion.
- Earnings. Profits could double to $0.28 per share.
What management says:
Twice the profits -- sounds pretty good, huh? But get this: Last quarter, GameStop's net income increased by more than 150%. Management informed us that the trouble twins Electronic Arts
Looking forward, GameStop predicts that additional offerings from gaming companies like Nintendo, Konami, and Microsoft
What management does:
And apparently, it doesn't even need to expand margins to do it -- not gross margins, at least. Those continue to slide, as GameStop just as continually proves the validity of the maxim "make it up on volume." Operating and net margins just keep on growing.
2/07 |
5/07 |
8/07 |
11/07 |
2/08 |
5/08 |
|
---|---|---|---|---|---|---|
Gross |
27.7% |
27.3% |
26.6% |
25.8% |
25.6% |
25.4% |
Operating |
6.4% |
6.5% |
6.5% |
6.6% |
7.1% |
7.2% |
Net |
3.0% |
3.1% |
3.2% |
3.5% |
4.1% |
4.3% |
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Perhaps the most interesting factoid GameStop voiced last quarter, though, was the number 38. As in, 38% of gamers are now female.
Because with no major competitors left to beat (yes, I know there's still Best Buy
GameStop's future, therefore, hinges on its ability to grow the gaming market. Tapping into the female gaming population for long-term growth seems like an excellent way to accomplish that goal.
Check out recent happenings among two of GameStop's star suppliers in: