Financial Analysis: GameStop (GME) vs. Its Rivals

GameStop (NYSE:GME) is one of 67 public companies in the “GAMING” industry, but how does it compare to its rivals? We will compare GameStop to related companies based on the strength of its earnings, dividends, analyst recommendations, profitability, risk, valuation and institutional ownership.

Earnings & Valuation

This table compares GameStop and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GameStop	$3.67 billion	$131.30 million	51.38
GameStop Competitors	$2.48 billion	$24.00 million	15.21

GameStop has higher revenue and earnings than its rivals. GameStop is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and recommmendations for GameStop and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GameStop	1	0	0	0	1.00
GameStop Competitors	399	2346	5101	140	2.62

GameStop presently has a consensus price target of $13.50, suggesting a potential downside of 42.88%. As a group, “GAMING” companies have a potential upside of 17.45%. Given GameStop’s rivals stronger consensus rating and higher possible upside, analysts plainly believe GameStop has less favorable growth aspects than its rivals.

Dividends

GameStop pays an annual dividend of $1.52 per share and has a dividend yield of 6.4%. GameStop pays out 330.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “GAMING” companies pay a dividend yield of 1.3% and pay out 31.1% of their earnings in the form of a dividend.

Institutional & Insider Ownership

29.2% of GameStop shares are owned by institutional investors. Comparatively, 43.1% of shares of all “GAMING” companies are owned by institutional investors. 12.3% of GameStop shares are owned by insiders. Comparatively, 23.0% of shares of all “GAMING” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

GameStop has a beta of -0.81, indicating that its share price is 181% less volatile than the S&P 500. Comparatively, GameStop’s rivals have a beta of 2.41, indicating that their average share price is 141% more volatile than the S&P 500.

Profitability

This table compares GameStop and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GameStop	5.67%	5.25%	3.99%
GameStop Competitors	-66.67%	-45.87%	-5.37%

Summary

GameStop rivals beat GameStop on 8 of the 15 factors compared.

About GameStop

GameStop Corp., a specialty retailer, provides games and entertainment products through its stores and ecommerce platforms in the United States, Canada, Australia, and Europe. The company sells new and pre-owned gaming platforms; accessories, such as controllers, gaming headsets, and virtual reality products; new and pre-owned gaming software; and in-game digital currency, digital downloadable content, and full-game downloads. It sells collectibles comprising apparel, toys, trading cards, gadgets, and other retail products for pop culture and technology enthusiasts, as well as engages in the digital asset wallet and NFT marketplace activities. The company operates stores and ecommerce sites under the GameStop, EB Games, and Micromania brands; and pop culture themed stores that sell collectibles, apparel, gadgets, electronics, toys, and other retail products under the Zing Pop Culture brand, as well as offers Game Informer magazine, a print and digital gaming publication. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1996 and is headquartered in Grapevine, Texas.