GameStop’s Transformation Catches Fire

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[-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheJuiceAlternate%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E98%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D602674?utm_medium=ic-nl&utm_source=115274 ) Proprietary Data Insights Financial Pros’ Top Former Meme Stock Searches in the Last Month Rank Ticker Name Searches #1 [GME]( GameStop Corp 294 #2 [SPCE]( Virgin Galactic 92 #3 [ZM]( Zoom Video Communications 42 #4 [TLRY]( Tilray 26 #5 [AMCX]( Amc Networks 1 #ad [Daily Stock Advice With Actionable Insights]( Brought to you by [Stansberry Research]( [Banks trigger dollar shakeup]( [ Stansberry Research - Banks trigger dollar shakeup]( You've likely heard a million different warnings about the changes taking place in America's financial system right now... How the White House plans to take the dollar fully digital... Track and monitor every transaction you make... or ban cash forever. You may even have heard our rivals abroad – now known as the BRICS+ group – are preparing to launch a rival currency to "destroy the dollar." The problem is... those wild predictions all miss the real story unfolding in the US financial system today. It involves the US dollar... and a scheme backed by the Federal Reserve, US Treasury, and 41 major banks. This huge shift is bigger than a digital dollar or anything like that... and it could have seismic implications not just for our currency, but for our savings, retirement, and whole way of life. The problem is, I haven't seen anyone out there properly explain what's really going on – and what you need to do to prepare for it. Today I'm stepping forward to change all that. I just posted everything you need to know about it online, including the three steps I recommend you take to prepare, 100% free of charge. [Just click here now for the full story](. GameStop’s Transformation Catches Fire In 2021, shares of GameStop climbed over 2,700% in a matter of weeks. Brokers had allowed traders to short more shares than were available to trade. So when Reddit banded together to send the stock higher, people who shorted the stock were forced to buy it back at higher prices, creating one of the biggest short-squeezes in history. Three years later, GameStop’s stock is back where it started. Some financial pros keep expecting this meme stock to catch a second breath of life. We’re not so sure. And here’s why… GameStop’s Business Catering to the kid in all of us, GameStop is an American retailer specializing in video games, consumer electronics, and gaming merchandise. Sales for the company’s +3600 stores are broken down as follows: Hardware and Accessories (50% of total revenues) - Encompasses new and pre-owned gaming consoles, controllers, headsets, virtual reality products, and other devices. Software (35% of total revenues) - Involves sales of new and pre-owned gaming software, in-game digital currency, downloadable content, and full-game downloads for various console generations. Collectibles (15% of total revenues) - Includes a range of products such as apparel, toys, trading cards, gadgets, and other pop culture and technology-related retail items. While most sales come from the U.S., GameStop also has a large global presence. [Sales] [Source: GameStop Q3 2023 Financial Results]( Financials [Financials] Source: Stock Analysis Despite efforts to transform the business, sales continue to decline year after year. However, operating and profit margins, as well as the free cash flow margin, have improved. The company embarked on a cost cutting strategy that closed 118 stores last quarter on top of the 693 shut down in the past year. Plus, GameStop has laid off numerous employees, including senior executives. Back of the envelope math says their plans are working. Sales per store have risen by 11.1%. However, it’s unclear if underlying growth at the individual store levels is up, flat, or down. Valuation [Valuation] Source: Seeking Alpha GameStop expects to turn a profit next year. And this year, they generated enough operating cash to trade at 33.5x cash. However, all the other meme stocks we identified, except Virgin Galactic (SPCE), generate positive operating cash, with Zoom Communications (ZM) and AMC (AMC) trading at much better multiples. Unless cash flow grows, seeing any value in GameStop is tough. Growth [Growth] Source: Seeking Alpha We noted the revenue decline earlier. Every other former meme stock hasn’t suffered the same fate. In fact, only AMC expects negative sales growth next year. However, none of them demonstrate earnings growth. And GameStop trounces them on free cash flow growth. Profitability [Profit] Source: Seeking Alpha GameStop’s margins are abysmal, save for its free cash flow. However, you look at Zoom, Tilray (TLRY), and AMC and realize what GameStop produces is the bottom of the barrel. [All eyes are on Real Estate & Private Equity as investors hedge against inflation.]( Know the market's next move with the latest Alternative Investment news and trends when you sign up for The Alt newsletter for FREE! [Subscribe now.]( Our Opinion 2/10 Transforming a dying company is tough. It’s like watching Blockbuster or Radioshack trying to survive. Gaming is hot. But GameStop doesn’t have a competitive edge. It may find a way to become profitable. Yet, that’s only one step to saving the business. 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