Thus, GME should be able to stay afloat while waiting for the release of the next-gen consoles. Management has also projected adjusted diluted EPS of $1.15-$1.30 and adjusted FCF of $225-$250 million for 2019. GME currently has $424 million in cash versus $418 million in long-term debt.
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The company has a strong balance sheet and continues to generate free cash flow. (Sony and Microsoft will be launching new consoles next year in Q4.) Although sales and earnings have been down significantly, at least we are seeing trough earnings or somewhere close to it.ĭespite all the negative press around GME, we believe the situation looks worse than it actually is. Furthermore, earnings will continue to suffer until Q4 2020 because the industry is currently at the end of the console cycle. The business is currently challenged due to the rise of digital downloads, competition from other retailers, and increased gaming on mobile and computers. GME also publishes Game Informer magazine. Customers are able to trade in consoles, games, and accessories for cash or store credit through GME’s buy-sell-trade program. GME offers new and used video gaming consoles, video games (both physical and digital), accessories, collectibles, and other miscellaneous items. “Gamestop is a video game retailer with over 5,700 stores across 14 countries. RF Capital mentioned GME in its Q3 2019 investor letter: An insider purchased 500,000 shares at around $16 in December 2020. One of the biggest hedge funds having stakes in the company is Richard Mashaal’s Rima Senvest Management, with 3.22 million shares of the company. Keeping this in mind let’s take a look at the best micro-cap stocks to buy: 5.
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